This is how bank originated debt works in the apartment scenario you describe: The lender collects their origination fees and debt service payments are then collected priorty every month until the loan is paid off.  

One offered asking price with a $20,000 down payment and atleast a 3 year balloon.I really need to get this house sold.

I liked the large down payment I got up front but the property never cash flowed.

Who ever is doing your title work is the person who you send the down payment, origination, and lender fees to.

Would I be able to take out a loan, let it sit in my personal savings account for at least 60 days and be able to use that as a down payment on a house?

The issue is, based on her credit report and other known info, I added all the expenses: (car payment $722, debt obligation/month $1900, rent, renters insurance, utilities, estimated grocery, living necessities, her total **essential** expenses would be at least $800 greater than her net income. 

Coops in NYC will require 2 years maintenance and mortgage payments to be available post-closing. 

My credit score is 720+ and a down payment for an average property in Louisville, KY shouldn’t be a problem. 

Consider that the other unit is paying or close to paying the debt service and you have little to no house payment. 

If the mortgage rates are higher, that means the US debt payments will be higher because its tied to the federal fund rate.