HART not funding after close

this is in the state of washington. purchased a home using a down payment assistance program called h.a.r.t. we closed, were given the keys, moved in, and two days later recieved a call from our real estate agent telling us that the hart funding had not yet gone through, that the owners were upset and wanted to charge rent, that my home insurance needed to be verified because I was no longer the owner, and that the closing costs were going to be adjusted. my question is two fold. 1) what are my options as the would be owner that is now living in the house? do i have any legal leg to stand on as far as keeping the house? 2) can i persue the real estate agent and/or mortgage broker for emotional damages? (who needs to be called two days after a move in to be told that the funding all of a sudden isn't there when they already confirmed it was there?)this may seem like a trivial problem to you so thanks in advance for your advice.

[HomeGuru]

Something does not seem right. Did you use escrow? Escrow should never have closed without the funding and clearing the account to pay off the Seller.