Not sure what the NJ contract says but in FL the verbiage is "Buyer shall make mortgage loan application within 5 days after Effective Date""If Buyer does not receive Loan Commitment by Loan Commitment Date, then either party may cancel this Contract "If you have not provided a Loan Commitment (this is different from a prequalification), you should be able to cancel without forfeiting your EMD.If you are fine with forfeiting your EMD then you can cancel without using contingencies.

The hassle of trying to raise $5k and deal with a partner just doesn't seem worth it and I would question your commitment to the deal if I were your prospective partner. 

Of course I'm not sure this would go under that category because the home owner didn't fully commit yet. 

Do you think we can have a separate contract between partners committing each of us to each loan even if the loan is on one partner's name?

If you want them to work with you, give them confidence that you are serious and committed (i.e. not a time-waster).  

You don't want to commit to living with someone that isn't a good fit.

Yes, there is a residency requirement for most of the low down payment mortgages, and it is unwise to commit mortgage fraud!!

It's important to me to give all clients the same attention, whether they are purchasing a small residential property or a $500,000,000 commercial portfolio, and the time commitment to properly address personal home purchaser's or seller's needs just doesn't allow me to do that, so I'd rather not take them at all.

Will absolutely keep in mind the potential benefit of not committing as the fallback buyer!

Every lender differs in the paperwork arena but all want a personal guarantee, mortgage, note, title commitment, and other miscellaneous items.Call me if you have other questions and I will try to answer as best as I can.