My loan officer said that underwriting won't accept a gift as a down payment so the money + reserves would have to be transferred to my account and it would have to sit there for a couple months.

One program here in Arizona offers downpayment assistance up to 5% as a gift to the buyer.

She does not want to pay cash for a place, but I am sure if I gift her funds FHA she may be able to get the loan with reserves.Thank you for asking this question!

All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.Note the PRESUMPTION of brokering and the person has to PROVE they are not. 

Idea: Take a mortgage out on the house (BECAUSE IT IS CURRENTLY FREE AND CLEAR),  pay off my brother and myself, and then have my relatives pay off the loan and then "gift" them the house at the end?

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The 25 percent can come from gifts from relatives, savings, or business income, but they need to make a large down payment because I want people who are committed to home ownership and community.  

They can ask for special dispensation from it from my mom (who is the executor) so they can put a down payment on a reasonable house, pay down student loans, etc, but that way they can't blow it on a new car every year.My dad's is set up where he is leaving gifts to certain people in his life, $1,000 for his barber, a former property manager, that sort of thing, so friends and acquaintances can have a nice memory of him.

This will be easier to explain if you partner with your professor in an LLC as a gift cannot comprise 100% of the downpayment. 3) I think each scenario will be new and unique to you.

Considering your 25, unless you're receiving an extremely large gift from your parents as a down payment your home probably won't be expensive enough for the commission to be worth it. 3% of a $300k is only $9, and by the time to figure in a transaction coordinator and your broker split you'll be walking away with half that.