@Kinjal Patel, I do think home warranty policies are generally a scam. 

(I own the home and met with previous owners)Anyways looks like they are trying to scam people out of a deposit and first months rent.

I don't think that these programs are necessarily a scam but they rarely deliver what they promise and they often cost a lot of money.

Personally,  I have not encountered one that does not allow you to have any cash in the bank.

100% and 100% is HIGHLY unlikely (outside of investors who have built a strong relationship with a balance sheet lender or if the loan is cross-collateralized). 4% is a scam - plain as day. 

What we are encountering includes:1. 

You'd only likely encounter any issue if you a) have a Tesla car loan on your credit report or b) your son doesn't pay for the house, and you don't pay for the house and they have to file for repossession.

I'm curious,  what type of scams are you seeing? 

Unfortunately, this process won't give you any clues into the smoothness of their loan process from origination to closing, but at least would let you weed out a scam or a company that may pull a bait and switch on you a few days before closing.First, you can ask what name they close loans under, and then do a public records search in your market (if they have closed any in your market) online. 

This is concerning to me because in the 10 years I have had rentals I've never encountered a tenant like this.