Most RM's are in default due to a "maturity event" which is industry term for dead borrower, balloon now due.The point is to look for the triggers or evidence of a problem.

You can also use your borrowing provisions from a 401k.

We originally had the idea of me buying the property and having the deed solely in my name, with her using her underwriting-friendly financials as a cosigner/co-borrower.

The 'better' alternative is as @andy points out  to borrow from an independent party, with recorded security interest, proof of loan term compliance... all in an arm's length transaction.

You guys could borrow a hard money loan to cover the purchase and rehab and one renovated refi out. 

Right to Redemption means "The legal right of any mortgagor or borrower who owns real estate to reclaim his or her property.

When you apply for the mortgage the application will ask "is any part of the down payment borrowed". 

I used a construction loan for $84k and borrowed $20k from a good friend to fund the down payment on the loan.Over the next 3 months, with the help of my parents and my father-in-law we rehabbed the home.  

In the meantime, you didn't get paid, so you might want to get payment from your borrower.

In other words would you drop the price to 100k or 103500 since they would only be borrowing 100?