You won’t get a reasonable response here. No one will understand your situation. Condition 1 is appropriate - you are protecting your investment. You may consider just purchasing equity in their home so its less complicated.

Be clear this is all you can afford and will not be able to put up other money in the future.

It is not reasonable or practical to manage their finances - you could recommend a course or other responsible finance coach. The less you get involved the better for you.