I feel like there's so much out there already, so I guess that's why I'm asking what you're proposing to do?

I am seeking anyone's insight on how should I counter offer the proposal.

What kind of interest rate should I propose? 

To propose something you will have to put the numbers together That is, number of months, interest rate, present value ( or what you are paying for it) and monthly payment.  

:@Garrick Solberg Here's a suggestion - buy a multi-family property for 5-10% down because you'll owner-occupy it, then just leave one unit empty for 12 months to satisfy the owner-occupancy requirement -  you will 'live' there"While this is a creative solution, caution may be prudent as the proposed action would include knowingly making a misrepresentation to a mortgage lender in violation of Washington's Mortgage Lending and Homeownership Law (RCW 19.144.080).  

Putting the poor proposed terms aside, based on what you stated your goals are, the idea of seller financing doesn't fit those goals whatsoever.

You definitely want an experienced agent to have eyes on all of the paperwork and details for your first deal, but I think it would be a win-win for you.For the actual transaction, you could propose a reduced commission since you are the co-buyers agent on the deal when you send your offer to the listing agent.

The seller would like to keep 2 of the units occupied until close and proposed to give the tenant who he originally gave notice to the opportunity to occupy the unit that is being vacated by the second tenant.

At this point I have garnered the attention of a few private lenders and have discussed my ideas with them enough for them to request a proposal.

If you have a lot in mind, maybe you can submit a proposal to the development firm?