He also states they don't have enough for the down payment (which he says he needs $230k for the downpayment).

@Alex ValenzuelaFocus on loan term if they don’t negotiateAmortize it over 30 years and your payment will be peanuts.

Would I assume liability for non payment?

IM USING HARD MONEY SO THOSE MONTHLY INTREST ONLY PAYMENTS ARE KILLING ME ASWELL 

Citi Bank just came out with a low down payment, no PMI option for certain neighborhoods.

Should I at least offer to pay the down payment?

The best solution in your situation would be to get a non-owner occupied loan with no pre-payment penalties to buy the building then cashout refi in September when you move. 

The most important thing to consider would be that if you're using your HELOC for down payment / renovation costs and holding costs, then the refinance MUST get you all of your cash back to pay the HELOC back to 0.

I wanted to get into a quadplex but came to a realization that it was too far fetch for me when my lender ask I need to have 70K total (down payment/closing & 6 months reserve) for a 535k quad.

We could probably manage the payments without selling the cabin; however, it would provide significant cushion and allow us to pursue some other opportunities.