Ron hit on some high points for the buyer, for the seller there are some risks too. First, you are a landlord during the "Lease" period. It's your house so if the roof leaks, furnace breaks or the plumbing fails, it's on you to fix it. Your tenant will, as Ron stated, be desperate and have credit issues. This may mean their ability to pay the rent could come into play. If you explore this option as a seller/landlord, you need to fully understand your tenant/buyer's situation and determine if it was a onetime credit event due to circumstances beyond their control or just a long pattern of not being financially responsible. There are some great people who have been hurt in the economic crash that will recover and do well, but there are always others who just won't learn how to control their finances.
You are desperate!
Your Credit or Finances, or both, will not allow you to go the conventional route:
You need the Seller to help you out!
The Seller will know it, and you are going to pay dearly for this service:
There aren't too many altruistic Sellers out there.
The terms that can be written into a Lease/Option can be dangerous to you:
How long is the Option period?
How much money are you putting in to the Option?
What happens if you are not able to execute the Option?
How do you know what your financial situation will be 2-5 years from now?
How much is the rent in the meantime?
Who will be responsible for maintenance and repair in the meantime?
What will be the Market Value of the home in 2-5 years?
What will be the Selling price 2-5 years from now?
This is the Ultimate Caveat Emptor!