FHA Loan Advice.Social Security- Elderly Owner & Long Term Tenant

[Dylan Collier]

Good afternoon Bigger Pockets;

A friend has come to me with some trouble regarding her house purchase under an FHA Loan, and I am new to these loans, so I thought I would throw it out there to see if anyone else has had a similar experience or can help.
For the sake of this question lets call my friend (Kat) and the seller/elderly lady (Marg)

She (Kat) is purchasing a home off an elderly woman (Marg) in Southern Florida.
She (Kat) has been given pre approval on any other property in the same budget, by 2 different banks, but is having a hard time securing this one as she is currently living in it. FHA is attractive to her due to the down payment size.

So here is the situation;
Kat has known Marg a while, and is getting a good deal on the house.
and by FHA request, she has been living in the house for 6 months before they will consider the loan. (Hear this is standard with these loans)
The elderly woman, Marg, has fallen and can not live on her own anymore. Marg is on Social Security and is living with care.
Kat pays Marg in Cash, in order not to jepordize the elderly womans (Marg's) SS.
The FHA will not accept this, as they want to see proof of rent paid, but the sellers do not want the rent coming in as it could jeopardize their mothers (M) SocialS.

The elderly woman owns the house outright and is quite flexible when it comes to payments and allowing my friend to possibly stay another 6 months in order to satisfy the FHA, but is at that point where she would like to get her estate in order for her will and would not be able to carry financing for a long period.

Is there a way my friend can comply with the FHA, prove income but not jepordize the ladies SS with rent coming in every month? Maybe a trust that the rent could be paid into, where it would not be viewed as direct income for the lady. Seller carry or rent to own to satisfy the FHA.

Is there any general advice, or experience anyone has with something similar?

My friend loves this house, and cannot afford a large down payment at this time making the FHA more attractive.

Thank you for all the support, and look forward to chatting to you soon.