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Repair Credit Calculator
A seller-paid repair credit can fund post-close repairs, offset closing costs, or substitute for a price reduction. But lender-imposed caps (3-6% of price depending on loan type) and appraisal risk limit how much is usable. This calculator compares a credit, a price reduction, and an outside-of-escrow cash payment to find the cleanest path.
Allowed seller credit
$8,000
Max allowed (concession cap)
$25,500
Amount over cap (restructure)
$0
Price-cut monthly savings
$42
Price-cut lifetime savings
$14,944
Equivalent new price (if price cut)
$417,000
How the math works
On $425K conventional at 80% LTV with a $8,000 requested credit: concession cap is 6% = $25,500, so $8,000 is fully allowable. Alternative $8K price cut reduces loan by $6,400 (80% LTV) and saves ~$42/month — $15,000 over 30 years in principal + interest. Price cut wins for long-term buyers; credit wins when cash at close is tight.
If your ask exceeds the cap, restructure: take the cap as credit + any excess as a price reduction. Never exceed the cap — lender throws it back and closing delays cost both sides more than the credit was worth.
How to Use
- Enter contract price, repair estimate, and seller's willingness to contribute.
- Choose loan type to apply the right seller-concession cap.
- See the credit limit, effective out-of-pocket at close, and comparison with a straight price cut.
Frequently Asked Questions
What are typical concession caps?
Conventional (primary): 3% if LTV > 90%; 6% if LTV 75-90%; 9% if LTV < 75%. FHA: 6%. VA: 4% (plus unlimited closing cost). Investment property: 2%. USDA: 6%. These are lender-imposed; exceeding them requires loan resizing.
Price cut or credit — which is better for the buyer?
Credit if you need cash at close (closing cost + prepaid items). Price cut if you'll hold long-term — lower price means lower loan amount, lower monthly payment, lower lifetime interest. On a $400K house, a $10K credit saves ~$150 at close; a $10K price cut saves $60/month for 30 years ($21,600 lifetime).
Can the credit cover repairs post-close?
No. Once it's used at closing for costs, it's gone. The net effect is: you keep cash that would've gone to closing costs, then use that cash for repairs. Functionally equivalent to a repair fund, but the money path is 'credit → closing costs → your pocket → contractor' not 'credit → contractor.'
Does the appraiser see the credit?
Yes. If the credit is 'abnormally large' (especially 5%+ on a tight-comp home), appraisers sometimes adjust value down to account for what looks like a disguised price cut. Talk to your agent about the appraisal risk of a large credit ask.
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Walk-Through Deficiency Cost Calculator
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Home Inspection Cost Calculator
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