Trying to understand my Lenders requirements

[Nicholas R Paust]

I"m in the process of buying my first buy and hold property. I was able to get the property for $124500 and the property appraised for $125000. I was able to get a credit of $3750 due some needed repairs after getting the inspection done. I figured this was great because my loan is for $100K since the lender offers 80% LTV.

I'm now being told the sellers concession needs to stay under $3500 for them to be able to UW to 80% of the purchase price ($124,500) if the seller concession is greater than $3500 than the leverage will be based off the purchase price minus seller concession, so 80% of $124,500-3750 ($120,750)

The leverage on the loan is 80% LTV or LTC, whichever is lower.

I'm just trying to understand this because I thought it worked out in my favor.  I got a house that appraised and by asking for credit I figured it was less out of pocket.  This might now affect my decision for a second property with this lender. 

If someone could explain this better it would be appreciated.