How does "down payment assistance" really work?

I recently closed on my first home. Prior to closing, my loan guy and realtor suggested to use a "down payment assistance". Keep in mind that the loan guy and the realtor are buddies. Anyway, the realtor drew out the paper work, added a portion of the closing cost and the down payment to my loan. This... show more I recently closed on my first home. Prior to closing, my loan guy and realtor suggested to use a "down payment assistance". Keep in mind that the loan guy and the realtor are buddies. Anyway, the realtor drew out the paper work, added a portion of the closing cost and the down payment to my loan. This adds $7,000 to the principal purchase prise.
After closing, I found out that the seller actually paid 100% closing costs and that the "down payment assistance" was actually a gift from Nehemiah that I should not pay back www.getdownpayment.com. I called Nehemiah and they expressed that "it's not in their spirits to ask for payback on their gifts".
Conclusion;
-The loan guy recieved the money/gift from Nehemiah
-That same amount was also added to my loan, so I have to pay back with interest.
-This makes the loan officer 2x richer.
- I'm also paying the portion of closin cost + interest.
So someone is making alot of money off of me!
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