My mother put the deed to our family home in a Trust Transfer Deed in 2003 for my two siblings and I. 

Of course if you do not have any siblings and you are her only heir, then these issues would not come into play.Also to add I would be sure you have significant reserves so that you do not face foreclosure on her house due to a lay-off or another significant stressor which could prevent you from making the payments.

They are enjoying the reduced payment amounts but said they want me to be entitled to the amount I gave them (instead of dividing it with my siblings) if anything were to happen to them. 

I invest with a sibling, uncle and aunt. 

Treat it like you lending a sibling money, sure you may ask for interest but you may not vet the deal as thoroughly because there is a trust factor already involved and its someone's personal money.

The owner was not originally from this area, and has out of state siblings, but no s/o's, children, or parents.

Be very careful with your budget as this kind of work can easily double in price if you arent carefulAlso, having also owned RE with siblings after both parents passed, I suggest that you have a written agreement on what the scope of the work is and who will manage what aspects.

I would have to screen them as if I am screening any two people whether they are a couple, or siblings, or roommates. 

The family friend and their sibling are her only children.

Such as a mother and adult child, cousins, adult siblings.