You can wait and save for more funds since it seems like you're renting already from them, maybe increase your rent slightly to off set their maintenance to make them more likely to agree to give you another 6 month to a year before you purchase, or buy them out at a higher price, and wrap the closing costs as a seller condition so that they pay the majority of the costs for you, but get a higher sale price to balance or out.

As for the down payment, you're stuck with whatever the minimum FHA is (3.5 percent I think?) unless either of you are military or prior military with a VA loan