Lender Deal Gap Calculator: Fund the Full Loan
Enter the purchase price, the seller's number, the buyer's loan and your limits. See whether a structured installment sale on the seller's side closes the gap so your loan funds as underwritten, in first position with no subordinate seller note, and the loan you keep and lose if the deal dies or flips to a seller carryback. Playbook: Fund the Full Loan.
By Hans Goldstein, EA · Updated October 14, 2026 · Tax figures: 2026 federal brackets (IRS Rev. Proc. 2025-32) and the 3.8% net investment income tax
The gap closes on the seller's side. A structured sale at the purchase price of $9,500,000 nets the seller at least what $10,000,000 in cash nets (break-even $9,283,067). The buyer pays in full at closing and your loan funds in first position with no seller note behind it.
Your own limits
- Loan requested$6,500,000
- Value used (lesser of price and appraisal)$9,500,000
- Loan-to-value68.4% against your 70% limit
- Largest loan under your loan-to-value limit$6,650,000
- Largest loan under your DSCR limit of 1.25x$6,791,371
- DSCR at the requested loan1.31x
- Appraisal against the priceSupports the price
- Loan that funds under your limits$6,500,000
Does the gap close on the seller's side?
- Purchase price (what the buyer pays at closing)$9,500,000
- Seller's number, all cash$10,000,000
- Gap$500,000
- Lowest price where a structured sale nets the seller the same$9,283,067
- Purchase price against that break-even$216,933 above it
Structure used: 10 level yearly payments at a 5% payout rate (an assumption, not a quote; set on October 14, 2026, the real rate depends on the carrier and the term on the day of the sale), no cash taken at closing beyond the loan payoff, closing costs of 5% commission + 0.5% escrow and title + the state transfer tax estimate. The section 453A interest charge applies above $5,000,000 of installment obligations and is already inside the structured figures: $44,431 over the schedule.
The loan you keep and the loan you lose
Carryback: the price rises to the seller's number, the buyer's cash does not, and the seller carries the difference. This assumes your policy holds the first loan plus the seller note inside the same 70% limit. Your policy decides every loan.
The lender's angle
Your angle: the loan funds, and there is no subordinate seller note. The buyer pays all cash at closing: the buyer's cash plus your loan, through escrow. The seller is paid by the structure, holds no lien and no note on the property, and the buyer makes no payments to the seller afterward.
- Origination fee on the loan (1%, assumed)$65,000
- First-year interest (7%, assumed)$455,000
Gross, not profit. The fee and the rate are illustrative assumptions set on October 14, 2026, the same kind of assumption the Fund the Full Loan playbook uses (7.0% and a 1.0% fee); they are not a quote. Change them to your own.
Read how it works for your file in Fund the Full Loan: a playbook for lenders.
Get the REAL numbers
Talk to real estate deal tax expert Hans Goldstein, EA
Why now: a structured installment sale has to be set up before closing. Once the money reaches the seller or an intermediary it cannot be restructured.
These are estimates. Have a qualified tax professional run your real numbers in a 15-minute scope call.
Book my 15-minute callThis is an estimate. Getting it right down to the tee takes your actual tax forms (returns, K-1s, depreciation schedules), a consult and a paid analysis. The first 15-minute scope call is free.
How the fund-the-full-loan calculator works
A buyer is $500,000 short of the seller's number. If the seller carries the difference, your loan gets smaller or gets a second lien behind it. If nobody closes the gap, the deal dies and the loan is never funded. This calculator checks a third way: a structured installment sale on the seller's side. The buyer pays all cash at closing, which is the buyer's cash plus your loan, through escrow. The seller is paid by the structure, holds no note and no lien on the property, and the buyer makes no payments to the seller afterward.
It does three things. First, it runs your own limits (loan-to-value, appraisal and, if you give the net operating income, DSCR) to find the loan that funds at the purchase price. Second, it uses the seller's tax numbers to find the lowest price at which a structured sale nets the seller the same as the seller's number in cash. If the purchase price is at or above it, the gap closes without a seller note. Third, it shows the loan you keep and the loan you lose in three outcomes: structured sale, deal dies, and seller carryback.
Worked example, computed October 14, 2026
A buyer pays $9,500,000 with a $6,500,000 loan (68.4% of value), an appraisal of $9,500,000, net operating income of $720,000, a 70% loan-to-value limit, a minimum DSCR of 1.25 and an assumed 7.0% rate on a 25-year amortization. The seller wants $10,000,000. With the calculator's labeled seller assumptions (basis $4,000,000, depreciation $1,195,670, loan payoff $2,500,000), the break-even price is $9,283,067. The purchase price is $216,933 above it, so the gap closes and your $6,500,000 funds in first position with no seller note.
| Outcome | Loan you keep | Loan you lose |
|---|---|---|
| Structured sale on the seller's side | $6,500,000 | $0 |
| The deal dies | $0 | $6,500,000 |
| The deal flips to a seller carryback | $6,150,000 | $350,000 |
The carryback row assumes the price rises to $10,000,000, the buyer's cash stays the same, the seller carries the $500,000 difference, and your policy holds the first loan plus the seller note inside the same 70% limit. Combined loan-to-value is then 73.7%, so the first loan shrinks to $6,150,000. Your policy may treat a carryback differently; the calculator states its assumption and your underwriting decides every loan. The fee and interest at stake on the full loan are $65,000 and $455,000 in the first year at an illustrative 1.0% and 7.0%, set October 14, 2026. That is gross, not profit.
What your underwriter will ask
- The contract. The structured sale is part of the seller's side of the contract; the buyer pays the full price at closing.
- The assignment. The seller's payments are owed by an assignment company, usually funded by a fixed annuity from a highly rated life insurer whose name and ratings are disclosed in writing before anyone signs.
- Secondary liability. In many programs the buyer stays secondarily liable if the payer fails. Ask your credit officer how your policy treats that obligation.
- The rate. A structured sale does not give the buyer the seller's low rate. The buyer pays your rate on the whole loan.
The Fund the Full Loan playbook for lenders covers these, the referral loop with listing agents and CPAs, and when a seller carryback still wins.
Ground rules for lenders
Hans does not pay referral fees, and you keep your own compensation. Nothing here promises you any compensation. Residential originators: RESPA Section 8 (12 U.S.C. 2607) governs settlement service referrals; your compliance officer decides how it applies to you. Hans does not advise on credit, never contacts your borrower without you, and everything is set up before closing.
The first 15-minute scope call is free. If the seller wants the written numbers and documents, the analysis is $5,000. Only the scope call is free.
How Hans is paid. Hans Goldstein, EA, is also a licensed insurance agent. A structured installment sale is funded with an annuity, so he is paid a one-time commission from the insurer only if a seller chooses one, built into the payout rate. He earns nothing from a cash sale. That is a conflict of interest, which is why every option is shown side by side and the seller's CPA and attorney review everything.
What the calculator assumes and does not do
- Estimates. Federal and state income tax and the 3.8% net investment income tax, figured by the same engine as our other calculators, with 2026 federal law held flat for later years (IRS Rev. Proc. 2025-32).
- Depreciation is treated as real property depreciation (taxed up to 25%). Equipment and cost segregation items are taxed higher and are not split out here.
- Not modeled: suspended passive losses, capital loss carryforwards, a 1031 exchange, state-specific special deductions, and anything the seller has already sold this year.
- The structured amount must be at least $100,000. Below that a structure cannot be placed, and the calculator says so.
- It is set up before closing. Once the money reaches the seller or a qualified intermediary, it cannot be restructured.
- The seller's payments are locked in. No speeding them up, borrowing against them or cashing them out. They depend on the assignment company's ability to pay; it is usually funded by a fixed annuity from a highly rated life insurer whose name and ratings are disclosed in writing before anyone signs.
- Net in today's dollars. The structured payments and the tax are both valued at the payout rate, so a structured net and an all-cash net can be compared on one line.
The rules the calculator applies
| Rule | What the calculator does | Source |
|---|---|---|
| Installment method | Gain is taxed as payments are received, in the gross profit ratio; a loan paid off at closing is a payment in the year of sale | IRC 453; IRS Publication 537 |
| Interest charge over $5,000,000 | On installment obligations over $5,000,000 at year end, interest runs on the tax not yet due. The calculator charges it at the IRS underpayment rate, 7% for the third and fourth quarters of 2026 | IRC 453A; IRS quarterly interest rates |
| Federal rates | 2026 brackets and capital gain rates: 0%, 15%, 20%, and up to 25% on unrecaptured depreciation on real property | IRC 1(h); IRS Rev. Proc. 2025-32 |
| Net investment income tax | 3.8% on the gain above the income threshold | IRC 1411 |
| State tax | Each state's 2026 income tax schedule as built into the Goldstein & Co. engine, read October 14, 2026; transfer tax by state from the engine's table | State revenue department rate tables |
| Payout rate | 5.0% a year, an assumption set October 14, 2026, used both to size the payments and to value them in today's dollars. The real rate depends on the carrier and the term | Assumption, not a quote |
All sources read October 14, 2026.
Lender Deal Gap Calculator questions
Does a structured sale change the loan I underwrite?
No. The buyer pays all cash at closing: the buyer's cash plus your loan, through escrow. The loan is sized and approved by your own policy, in first position, with no seller note behind it. The buyer pays your rate on the whole loan.
What does a seller carryback do to my loan?
It adds a second lien behind you and often shrinks the first loan, because the combined loan-to-value has to stay inside your limit. The calculator shows that under the assumption that your policy holds the first loan plus the seller note inside the same limit.
What is the buyer's exposure after closing?
In many programs the buyer stays secondarily liable if the payer fails. Ask your credit officer how your policy treats that obligation. The seller's payments are locked in and depend on the assignment company, usually funded by a fixed annuity from a highly rated life insurer.
Does the appraisal matter?
Yes. The loan funds on the lesser of price and appraisal. When the appraisal is below the price, a structured sale lets the price come down to the seller's break-even without the seller losing, which moves the price toward the appraisal.
Are the rate and fee real?
No. They are illustrative assumptions set October 14, 2026 (7.0% and a 1.0% fee, as in the Fund the Full Loan playbook). The interest shown is gross, not profit. Enter your own.
Do you pay referral fees?
No. Hans does not pay referral fees, and you keep your own compensation. Residential originators: RESPA Section 8 governs settlement service referrals; your compliance officer decides how it applies to you.
Sources
- IRC 453, installment method: Cornell LII, read October 14, 2026
- IRC 453A, interest on tax not yet due, obligations above $5,000,000: Cornell LII, read October 14, 2026
- IRC 1(h) and 1411, capital gain rates and the net investment income tax: Cornell LII, irs.gov
- IRS Publication 537, Installment Sales (buyer pays off a mortgage, contract price, gross profit): irs.gov
- IRS Rev. Proc. 2025-32, 2026 brackets, standard deduction and capital gain breakpoints (October 2025): irs.gov
- IRS quarterly interest rates, underpayment rate 7% for the third and fourth quarters of 2026: irs.gov
Related: Sell for less, net more calculator (brokers) · Close the gap calculator (buyers) · For professionals · Broker price-room tool · Structured installment sale calculator · All calculators
Educational estimate only, not tax, legal or investment advice. Federal and state income tax and the 3.8% net investment income tax; figures use 2026 federal law (Rev. Proc. 2025-32) held flat for later years. The payout rate is an assumption, not a quote. Your CPA should confirm any number before anyone acts on it. Hans Goldstein, EA.