I emailed the landlord warmly asking her if she had considered selling the house, and if so, could we work on an arrangement to purchase the home at the end of our lease.

Either they agree to a household cleaning arrangement or it's a trainwreck.  

Download your state landlord tenant laws, you could arrange a mutual lease termination buy out and charge a fee equal to several months rent to let him out, depends on state statues if there is a limitation to what that fee can be.Happens all the time so that's the nature of the business.

Of course there is always a certain degree of risk with any arrangement, whether tenant pays each month or 12 months in advance.

Originally posted by @Momchil Kanev:She will need to pay the tax on her 50%I am wondering if it would be possible to arrange the ownership 90/10 (Tenants in Common) or something, to avoid some of the tax?

Is your current arrangement perfect?

You're subsidizing their living arrangements and even after 10 years they can't qualify for a mortgage?  

I know realtors in my area who've done it for clients, however, I'm not sure what the arrangement is and what the incentive is for the agent.  

I have one lined up. just dunno how it'll work if I start to apply and then Capital One DOES come through. don't want to waste the other lender's time. doubtful he gets it done in 8 days also...will need to make arrangements for two families for prob at least a week.

Lots of investors have come to me asking for this kind of arrangement, but they typically are looking to buy properties in the $20k-$60k range.