Her responsibility and priority #1 is to assure her finances are in order to take care of herself.

Your responsibility (and your husband's) is to assure YOUR finances are in order (not by using someone else's financing) to take care of yourselves.

She is doing what any prudent person would. It is also NEVER a good idea to give or lend large sums of money within a family, as the relationship tends to go south.

Get out of her house yourselves, support yourselves.