Seller is willing to owner finance but cannot afford the additional monthly income (the monthly payments would make her ineligible for the HUD senior housing) I'm trying to avoid a typical all cash deal.

If you have low interest debt and can still afford to invest that is ok as long as you have enough cash reserves in case something goes wrong.

(I don't need immediate cash flow and care more about total long term returns).Relatively affordable compared to other large cities (though the same is true for  SFHs). 

To get the low down payment, you should look into how you could afford it without a co-borrower. 

You can still find a good amount of affordable homes!

We need affordability bad here in Denver and there are some groups who may be able to streamline the whole purchase and get you market rate.

Told her what it was and she asked if I could discount her rent so she could afford to go to a counselor so she could sleep better.   

If you are in your 20's, you can afford to be riskier than if you are in your 70's.

Where as something cheap like pine straw will require yearly maintenance but it will be very affordable.

If you can afford the 20 year payment, even with an unforeseen financial hardship then it may make sense to save on the interest.