Granted, I’m not proposing this for all markets.  

There is no reason for an end-buyer to be paying them anything at all, much less $1575 down and $149.63 per month.You proposed an After Repair Value of $45K on the high end.

They proposed the following with seller financing:Purchase price of $165K$25K down paymentLoan at 7%, amortized over 30 yearsMonthly payment of $875 (actual payment amortized with these #'s would be around $935)Balloon payment for balance in 5-7 years.My question to the BP community is what do you think of these numbers?

Currently it is proposed $45K loan paid back over 3 years at 20% interest.

But nothing has been proposed or passed yet to the best of my knowledge.

However, housing WHERE you want it, HOW you want it, and at a price YOU want to pay, well that's goes far beyond a "right".There have been many many solutions presented to improve housing affordability, like revamping our asinine building codes, reducing the cost of litigation, rewriting insanely punitive legislation such as the CRLTO, providing tax credits or reducing taxes, and increasing subsidies while reducing the red-tape associated with using those subsidies.

Proposed pets (size/breeds)4.)

They proposed the following with seller financing: Purchase price of $165K$25K down paymentLoan at 7%, amortized over 30 yearsMonthly payment of $875 (actual payment amortized with these #'s would be around $935)Balloon payment for balance in 5-7 years.My question to the BP community is what do you think of these numbers?

Or do I find the potential deal, run the comps and prepare what I plan to offer, then approach the HML with the proposal, get a letter of intent from the HML (if they like the deal), and then put in my offer to the seller?

You will insulate yourself from any changing legislation.