I always make sure I have some skin in the game.I think this is most definitely the way for you to go.

Has to be the right fit of course and both partners need to have some skin in the game but win-win all the way.  

My concern is that the report that the government did was over-the-top; all of the lead-painted surfaces in the house have been covered with latex paint and are not chipping, but the report still makes an issue of them.

I was trying to consider some factors that may come into play - from what I understand you can put as little as ~3.5% down under an FHA loan - will it be more beneficial for me to put "more skin in the game" with the largest possible down payment I can make (say, closer to 10-15%)?

You usually have to have some skin in the property in order for them to lend to you.

Paint every surface that can't be cleaned enough to look acceptable and ensure all the mechanicals are working properly.

The usury laws in Arizona - 10% cap... well, that is what on the surface at least.Btw, could you tell me more what you mean by "Also be sure to have both taxes and insurance escrowed to avoid a high price mortgage loan".

This structure first compensates either partner for skin in the game (kind of like you would otherwise need to pay for private money), then splits rest.On the legal structure, sounds like you'll want to set up an LLC, along with an operating agreement that specifies the different duties you each have, all the stuff you agreed on deal structure above.

Even having just greasy surfaces, you've got a food source. 

Except for small local banks and credit unions that keep skin in the game (portfolio loans), doesn't the bank want the loan to go through so they can flip it over to Wall Street for securitization?