I was the one that actually 'owned' the house. No one paid rent to me, but I was reimbursed for all utilities, food, etc. My only expense was the mortgage.
Since no one paid rent, it wasn't a 'boarding house.'
A friend of mine was making $20 an hour at a part time manufacturing job while he had classes, and full time plus overtime during breaks. It would have been plenty for a down payment on such a house, if he'd wanted to, but he put the money towards tuition to limit school loans instead. This was 20 years ago, give or take, so very much not the norm, but definitely possible.
To add: I think a minimum down payment for the mortgage probably would have been in the $4 or $5,000 range.
Rent back in 1991 in the college town was around $600 per person and up... we made out like bandits but we did have to share cars.
The others could have just stopped paying 'rent' and I would be stuck with the full mortgage...or I could have just sold the place and walked away with everything.
Definitely an exercise in trust and mutual self interest.
The problem wasn't sketchy mortgages, it was the borderline fraudulent financial shenanigans after that.
What do you think was funding the sketchy mortgages? The fraudulent financial shenanigans