EMD- HML how does it get factored in?

[Rigo V.]

In the process of negotiating on an REO. They are asking for a 10% EMD which i think is pretty typical. My questions is how does the 10% EMD factor into my HML? Is it a credit to what I would have to bring to the hard money lender to close?

For instance if the deal is $100K, $30K rehab and an arv $160K and the HML funds up to 65% of arv, 75% of the purchase and 100% of the rehab.

The HML would lend me max of $104K. $75K towards purchase $29K towards rehab. I would bring the balance $26K. If I paid $10K as EMD do I only need $16K to close with the HML? (Obviously there are points and stuff that we can exclude for the purpose of this example).