Great answer - Thank you - The lender has not asked for a mortgage or collateral yet. I have actually applied for a credit line against the home with a different bank for money to use as a down-payment on the business. I am concerned that the bank (business loan) or the current owner (owner financing also) may ask for a waiver of homestead. I have not retained a lawyer yet because the deal is still in the negotiation stages. I am curious if a creditor is allowed to ask for a waiver of homestead on a loan other than a mortgage for said property.
As you can see, I will be into this over my eyeballs!

In a business deal, it is generally buyer beware. For what you have at stake, you should get an attorney on standby to look at anything you may be asked to sign and answer any questions you may have. Should not be too expensive as you will only pay if you actualy use the attorney. Good luck.