Trying to buy condo from my landlord

If both you and her know what you are doing, the interest rate on your owner's financing agreement will be much higher, to cover both the default risk and the insurance, given you only have 3-5% down. You need to make sure that she's not in preforeclosure herself with her own mortgage.

Frankly there could be good value if you know exactly what you are doing, otherwise someone is going to get hurt--conventional lending standards exist for a reason. Having 3-5% down is way too leveraged for most practical purposes. There's very little to pursue for the seller if you were to default on her mortgage.

The only possible way to do this right is if you have a guarantor for her loan.