You are correct, you did not say to commit loan fraud.HUD states:"You may only break the owner occupant requirements if you relocate or establish residency in an area outside reasonable commuting distance from his/her current principal residence.FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year.Important: Under no circumstances may investors use the exceptions described in the table above to circumvent FHA’s ban on loans to private investors and acquire rental properties through purportedly purchasing “principal residences.”

Promissory notes are usually not recorded and hence are not in the public record, what is in the public record are the mortgage instrument or deed of trust, which do not include the loan amount.

Coupled with the fact that she has a much shorter time horizon at 60 than she would have at 30, 40 or 50, I would lean more towards getting this money into the hands of a fee based investment advisor and getting it deployed into exchange traded funds (or other suitable principal protected, low fee instruments) that will (if history is any indication) return her much more overall than the real estate portfolio will (if history is any indication), in a completely principal protected environment.  

In order for the lien to be granted Investor A must also be obligated on the note as they must retain a right of redemption onto the security instrument.  

As with any sophisticated instrument, however, one must commit to understanding the proper usage.  

That game was instrumental in training my brain. 

She should still put it into Trust instrument.

Or another instrument / strategy I haven't thought of?

Code § 1701j–3 - Preemption of due-on-sale prohibitionsSee the exceptions(d) Exemption of specified transfers or dispositions With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon— (1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property; (2) the creation of a purchase money security interest for household appliances; (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.

We have friends already in the business who are motivational,as well as instrumental in helping us get started.