Construction loan on a Own Finance loan, is it possible?

[Adam Read]

I'm looking at buying an older home built in 1910 it needs about $40 thousand to fix it up. It sits on just under 1/2 acre, 1175 sq ft, 3 beds 1 bath. Its three blocks from the local schools only 5 minutes from the interstate and 15 to 30 minutes from a high employment cities. The owner agreed to a below market offer, because of the work needed, she longer wants anything to do with rentals. She is willing to do a owner finance because banks wont loan on it with all the work needed. My question is does anyone know if you can get a construction loan with a owner finance and than refinance into a 30 yr fixed? Thanks in advance to the BP community for all your wisdom!