Sorry for posting the question above, I fixed it right after posting here, by following these steps I found on this site http://artofsimplicity.co.uk/wordpress-ftp-auto-upgrade-on-ubuntu
sudo apt-get install vsftpd
sudo useradd wordpress
sudo passwd wordpress # set password for wordpress when prompted.
sudo usermod -g www-data wordpress
sudo chmod -R g+w /var/www
sudo chown -R www-data:www-data /var/www
sudo vi /etc/passwd # change wordpress home to be: /var/www
sudo service vsftpd restart
sudo service apache2 restart