donnamos2, your friend needs a vocabulary lesson and a clue-by-four...perhaps he/she could buy the house for themselves, and you can move into their place?
You've just performed an act I like to call 'dodging a bullet.' I can tell you from a similar experience with a neighbor when I was a teenager that you could have potentially ended up in a very stressful, aggravating situation.
If circumstances were different (she was living down the street, you aren't a fellow single mother, etc) I'd say that since the neighbors all seem to have the same opinion of her, you might want to reconsider and develop some strategies for dealing with her, using a polite, firm spine. But next door? And her coming over and interjecting herself into your conversation? Also, sounds like the boys are really rough and who knows what their mom would do if they injured themselves while on your property. Red Flag City.
You're not rejecting the home because children with disabilities make you uncomfortable. You're making a wise decision based on your assessment of the quality of life you can already tell you will have. And be sure of this: being unable to use your own yard because of constant neighbor ridiculousness really can make even the greatest home feel like a prison.
So, don't listen to your friend--your gut is doing a great job thus far.