The amount on the letter was higher than the sales price of the house. 2 days before closing (within the 25 days of backing out incase of financing not being approved) the buyers agent came back and canceled the contract, and provided a letter from the lender which stated 2 reasons for financing falling apart. 1) Insufficient income for amount of credit requested2) Excessive obligations in relation to incomeThe buyers agent also told my agent that apparently the buyers had purchased a car 3 months before they went in for qualification and the lender didn't find that account in their credit report and thus provided the pre-qual letter. 

I'm experienced in the area but have always sold them to normal everyday buyers.

After many conversations I guess Private insurance normal there.

I had a normal 401(k), while she had a 403(b).

When you hear "small business loan" that is normally for office equipment, inventory, things other than real estate.I understand the motivation - I once thought as you do - but that's the reality of real estate lending.  

We have rental insurance and car insurance with State Farm. 

I have a deal that is much larger than my normal purchase.Asking 3 million, I can buy for 2.75 million.Seller stated they are not interested in owner financing any portion of the sale.What are other options for 20% down payment?

Assignment fees are normally paid at closing. most title companies will may you with a check or can wire you funds but  may charge for the service.

I mean that is the normal process. 

The owner is tied in a contract with their agent so you will need to be carful.