Good morning, NREB readers. One quick note before today's brief: this is our last Saturday Premium issue before Founder pricing ends September 30. You can still join for $7.99 a month or $79.99 a year. Starting October 1, pricing for new subscriptions will be $9.99 a month or $99.99 a year.

Now, let's look at a repair agreement that leaves the buyer with a problem.

In this illustrative transaction, your buyer is under contract on a $500,000 home with 5% down and a conventional loan the lender will sell to Fannie Mae. The contract already includes a $6,000 seller credit toward closing costs. Then the inspection comes back. A roofer confirms an active leak and quotes $7,500 to repair it. The water heater is aging but working safely, and the flooring in two bedrooms is worn but purely cosmetic; replacing both runs another $4,500. Twelve thousand dollars of work.

The buyer asks the seller to cover it. The seller agrees to an additional $12,000 credit. The amendment is drafted, everyone exhales, and the deal feels saved.

It may not be. Two questions are still open, and the amendment answers neither.

A seller credit pays the buyer's closing costs. That matters because every dollar of closing costs the seller covers is a dollar of the buyer's own money still in the bank after closing, and that leftover cash is what actually pays the contractor. So the useful question is not how big the credit is. It is how much cash the buyer will have after closing, and when the work has to be done.

Start with the cash. The buyer has $34,000 in total funds, including the earnest money already deposited. Before the inspection, the purchase takes $25,000 down plus $12,000 of closing costs and prepaids, minus the existing $6,000 credit: $31,000 of the buyer's funds, counting the deposit. That leaves $3,000.

Now the limit. On this loan, Fannie Mae caps seller financing concessions at 3% of the lower of the price or appraised value when the loan-to-value ratio is above 90%, which is $15,000 here. Those concessions also cannot exceed the buyer's actual closing costs, which are $12,000. The contract already uses $6,000 of that room. So only half of the additional credit fits: $6,000 of the new $12,000.

That moves the buyer's cash after closing from $3,000 to $9,000. Against $12,000 of work, the buyer is $3,000 short before setting aside any cushion at all.

And the other $6,000 does not quietly become spending money. Fannie Mae treats financing concessions above those limits as sales concessions, which must be deducted from the price used to calculate the loan-to-value ratio. On a loan already at this program's 95% maximum, that can change what the buyer is eligible to borrow. An amendment written this way needs lender review and a revised structure before anyone should rely on it.

The water heater and the flooring can wait, as long as they are what they appear to be: a heater that is working safely and flooring that is cosmetic. Fannie Mae allows an appraisal "as is" when conditions are minor and do not affect the safety, soundness, or structural integrity of the home.

The roof may not wait. Fannie Mae lists active roof leaks among the conditions that affect safety and soundness. When the appraisal reflects one, it must be made "subject to" the repair, and the lender must verify completion before it sells the loan. The escrow option Fannie Mae allows for minor items on existing homes does not extend to conditions like this. Ask this lender whether it will close before the roof repair is completed and verified. In this example, assume it will not.

A credit is paid at closing. It cannot pay for work that has to be finished before the buyer owns the house.

So the settlement everyone agreed to falls short twice: only half of the additional credit fits, and none of it arrives in time for the roof. The real decision is which settlement works for the loan, gets the roof repaired on the lender's timeline, and leaves the buyer able to pay for the rest with a cushion they can live with, ideally within the $12,000 the seller already agreed to spend.

That is what NREB Premium is for. Below the break: the settlement comparison, showing which structures get this buyer to closing and what each leaves in the bank; the repair responsibilities and the buyer and seller conversations that go with them; and a worksheet you can reuse on your next inspection negotiation. Founder pricing ends September 30….