30 yr Owner Finance, or Conventional/FHA mortgage option?

[Joe Gee]

So I have a dilemma.  I'm just put a house under contract that I plan on occupying as my primary residence.  While I was at the meeting with the seller, he asks if he can finance the deal.  He says he basically doesn't need the money, he owns it free and clear, and the terms would be 30 yrs fully amortized, at 5% interest, 10% down, no pre-payment penalty.  My original plan was to buy with a conventional loan with 15% down.  If I could get away with putting 10% down that would be better.  

The seller and I agreed that we would think it over and get back in a couple of days.  

I called my mortgage broker and he doesn't like the idea of owner finance cause there are many if's and but's. Primarily, what if the owner dies? I didn't think about that. I'm sure there is a back up plan to that. He says he can get me in FHA, 3.5-5% down, but I would need to do some repairs first.

So I guess my question is, is a 30 yr owner finance deal something that I should be worried about?  Can anything go wrong with something this long?  It's pretty hard to pass up those terms.  Especially since the underwriting won't be as stringent, and it won't take very long to close.  

Thanks