Your suggestion that owner financing would work for you is something that many more owners may have to come to grips with. As buyers with good down-payments but bad credit scores want to acquire a home, owner financing or land contracts, A/K/A wrap around mortgages will once again become popular.
But the difficulty is to find a seller willing to make such a sale--as usually they need the proceeds of the sale to make their move, and that stalls everyone.
Today there is a possible solution, using a land contract--in which you take posession, and make payments to the seller. By contract you sign a loan agreement with the owner, making monthly payments based on a 30 year mortgage schedule, but agree to close out the loan after 5 years by re-financing at that time. You have all the rights and obligations of an owner, but the seller keeps the deed until you have either finished paying the mortgage, or re-finance early.
In the meantime, to solve the sellers need for cash, he can either rent a place for himself or take an equity loan. There may be other options, but it would be illegal for him to apply for a reverse mortgage because he would have to lie about his continuing to live in the home.