Housing question? Renting vs. Mortgage vs. Something else?

So times are tough right now and it's even tougher that my sisters home burned down. She was only a renter (from a member of our family) and renters insurance gave her a nice sum. However, we are looking for a place for her to live and we are having a lot of trouble. Her credit score is bad because of hospital bills so apartments are out of the question, she has little income so mortages
will be very difficult, and we are just at a loss. It just seems so difficult in this economy. Any suggestions, or avenues that I am just drawing a blank to?
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