The BEST lenders I have ever worked with (as a borrower) are, as you say, quick to respond, reliable, honest, and never leave me hanging. 

I’ve just heard horror stories from landlords and I’m looking for suggestions on how to best vet tenants - Good credit, no missed rental payments in last 5 years, etc.

If you do, could I ask how that has been going and has the rents been comparable to the payment standards advertised by the respective housing authority?

Stop reading if you want.2) I couldn’t guess what “There is a 6 months of grace period before interest payment begins” means.3) They call their $3555 charge a “Loan Fee,” stated a few lines up as 2%. 2% of $235,000 (loan amount) is $4470.4) Do you seriously believe the loan fee, “… IS 100% REFUNDABLE IF THERE IS ANY DEFAULT FROM THEPART OF THE LENDER OR IF THE BORROWER CHOOSES TO TERMINATE THE LOAN.”5) It’s okay to pay an appraiser directly.

On the flip side, if you've got a bunch of Section 8 tenants living in a building that's in a neighborhood where a lot of the tenant base has good jobs, high credit scores, and are generally reliable people, you've got the most risky tenants in that tenant base and that ain't what ya want.

Rent was due by 5th but no communication on late payment and is not responding to my text/emails. 

Generally, lenders will require you to have a substantial down payment.

I'd look at the closing docs for something related to the pro-ration of expenses etc and see if you have anything there that could be a clause you point to for them to cover those payments. 

What % of purchase price is smart to put as a down payment? 

You might get these days 60% leverage so you'll likely need 40% down payment plus reserves and the financial institutions will want you to keep those capital reserves in their institution.If you are a new investor, there's a couple of opportunities to get started.