Advice on terms for purchasing with seller financing?

[Joel Fischer]

I found a home I am interested in purchasing. The seller is offering seller financing with 5% down and a 30 year term. The seller said they would eventually like the interest rate to rise to 5%, but didn't specify what they thought the interest rate should start at or when the interest rate would rise to 5%. I am looking in a hot market, so I suppose I don't have a lot of room to negotiate, but would appreciate any advice....

I am also interested to know what this means in terms my owner occupied status. I bought a home as owner occupied in August. How does seller finance affect my conventional or FHA financing options in the future?