The best I've found in MA so far requires 25% minimum recourse and 35% down for non-recourse.  10 year (5 fixed,5 ARM),25 yr amor. and some early payoff penalties. 

@Stephen Spradley, a grand or two, more like an arm or two ;)This article may not be the exact same scenario as yours, but it still has a lot of really good info on the subject.

I however would go over there as a neighbor, but explicitly tell her you have an interest in purchasing the property.

I care because the lease explicitly forbid it.  

Make sure everything is explicitly clear as to what is expected. 

Typically they are 30 year term, 3/1 ARM , at 7-8% interest. 

Buddy just have to make sure that the transaction of his IRA is truly 'arms length'. 

Assume: ARM, 20-25 year amortization, higher rate, periodic re-underwrite of all your financials. 

You should have a written policy and a written agreement with the tenant.As others have stated, the funds should be received as a "FEE" because deposits are generally understood to be refundable (some states say this explicitly).Your written agreement can say you are receiving this "fee" and apply it towards the tenant's security deposit once they sign the lease.

You then are never a wholesaler but the acquisition arm