I am surprised that terrible loan is the only financing you can find. Have you tried speaking to a local loan officer? They earn their keep... Which is nothing because their whole business model is getting people into mortgages, then selling the mortgage to a bank for an immediate payout (this is how they make their money). Call one and see if they can do better then a 10% 3 year ARM lol. That's loanshark territory.

Everything else seems risky, but if it's a dream plucked from childhood memory.. might be worth the stress of making it a stable place to live.. because then you'd be on your dream spot!

If it were me, I would only consider it with better financing terms. Maybe actually bring some money to the table so I could get a USDA or rural loan (assuming this is America)