Attend homeownership counseling; Receive a homeownership certificate; Ratify a sales contract within 120 days and settle within 180 days; Obtain a mortgage from a lender; Pass both a Housing Quality Standards and Private Home Inspection; and Contribute 3% toward the purchase (1% must be from personal funds).

Everyting from normal financing with 20% down (would be tough to find the 70-75k needed;  Seller is interested in Seller's financing, but I haven't done it before, and I'd need advice on what terms are acceptable/standard.

Do you required a non-refundable EM deposit even though that is not standard in the RE industry?

Those standards cannot violate either Fair Lending or Fair Housing standards and those require additional written policies and procedures. 

Is this a good deal by any standards?

Completly updated home to neighborhood standards.

When contracts are skewed to one side contrary to local customs your lock on the property may be very weak.I've sent standard contracts to sellers to sign and send back, done as an offer from the seller as it's unsigned.

At my institution we do 20 years as the standard.  

Ended up being a home run - Fannie Mae had already put it to rental standards with new paint and carpeting.

Standard homeowners forms have reductions in coverage when a house is vacant or unoccupied for a set period of time (30 days, 60 days, etc.).