How do I get TurboTax to enter seller-financed mortgage interest income on to Part 1 of Schedule B? I do not think the Installment Sale path is the correct method.

Enter it in the Interest and Dividends section.   If the interest was received as part of a sale that's not reported as an Installment Sale, you should report it here as Interest from a Seller-Financed Loan.  A sale will not be reported as an Installment Sale in the following situations:

• The sale does not result in a gain (for example, the sale was a loss, or the entire gain was excluded under the Primary Residence Exclusion) 
• All payments were received in a single tax year, OR
• You simply elect not to report the sale as an installment sale and treat the entire gain as taxable in the year of sale.