i was told it agenst the law to take a down payment from someone

Please consider this some preliminary guidance with respect to your inquiry.  Because the actual documents which you may have signed would need to be reviewed by an attorney and because the actual facts and circumstances which relate to this transaction would need to be considered, it is difficult to give you any definite advice and/or to respond to your inquiry.  You should consult with an attorney and provide all of the relevant information and any documents which relate to the transaction and your understanding of the monies you put down. Notwithstanding the above, if your understanding was in writing and that the monies you put down were not only refundable but that you could cancel at any time, then you are entitled to a refund.  If the loan had actually gone through, you could not cancel unless you repaid the funds loaned.  The money down, may not have been a down payment.  Typically there is no down payment for a loan but other fees such as an application fee etc.which is generally not refundable.  It is not illegal to charge upfront fees such as fees for application, credit checks, appraisals, etc. in association with making a loan.  Again, it would depend on the nature of the transaction, what the documents say (if terms and obligations are in writing, it is the document which would control this situation.) As you can see, there are many variables to be considered and because of the limited information available, it is difficult to fully respond to your inquiry.  Again, it would be my suggestion that you consult with an attorney who can more properly advise you. Marla D. Sones