diff --git a/tools/build_api.py b/tools/build_api.py
index 3702447c3f..8b00c64b7e 100644
--- a/tools/build_api.py
+++ b/tools/build_api.py
@@ -400,6 +400,7 @@ def _fill_header(region_list, current_region):
         start += Config.header_member_size(member)
     return header
 
+
 def merge_region_list(region_list, destination, notify, padding=b'\xFF'):
     """Merge the region_list into a single image
 
@@ -410,7 +411,6 @@ def merge_region_list(region_list, destination, notify, padding=b'\xFF'):
     """
     merged = IntelHex()
     _, format = splitext(destination)
-
     notify.info("Merging Regions")
 
     for region in region_list:
@@ -425,20 +425,17 @@ def merge_region_list(region_list, destination, notify, padding=b'\xFF'):
             notify.info("  Filling region %s with %s" % (region.name, region.filename))
             part = intelhex_offset(region.filename, offset=region.start)
             part.start_addr = None
-            part_size = (part.maxaddr() - part.minaddr()) + 1
-            if part_size > region.size:
-                raise ToolException("Contents of region %s does not fit"
-                                    % region.name)
             merged.merge(part)
-            pad_size = region.size - part_size
-            if pad_size > 0 and region != region_list[-1]:
-                notify.info("  Padding region %s with 0x%x bytes" %
-                            (region.name, pad_size))
-                if format is ".hex":
-                    """The offset will be in the hex file generated when we're done,
-                    so we can skip padding here"""
-                else:
-                    merged.puts(merged.maxaddr() + 1, padding * pad_size)
+
+    # Hex file can have gaps, so no padding needed. While other formats may
+    # need padding. Iterate through segments and pad the gaps.
+    if format != ".hex":
+        # begin patching from the end of the first segment
+        _, begin = merged.segments()[0]
+        for start, stop in merged.segments()[1:]:
+            pad_size = start - begin
+            merged.puts(begin, padding * pad_size)
+            begin = stop + 1
 
     if not exists(dirname(destination)):
         makedirs(dirname(destination))
diff --git a/tools/config/__init__.py b/tools/config/__init__.py
index f7ad8ebc38..1d51add46e 100644
--- a/tools/config/__init__.py
+++ b/tools/config/__init__.py
@@ -778,7 +778,7 @@ class Config(object):
         newstart = rom_start + integer(new_offset, 0)
         if newstart < start:
             raise ConfigException(
-                "Can not place % region inside previous region" % region_name)
+                "Can not place %r region inside previous region" % region_name)
         return newstart
 
     def _generate_bootloader_build(self, rom_memories):
@@ -797,8 +797,19 @@ class Config(object):
             if part.minaddr() != rom_start:
                 raise ConfigException("bootloader executable does not "
                                       "start at 0x%x" % rom_start)
-            part_size = (part.maxaddr() - part.minaddr()) + 1
-            part_size = Config._align_ceiling(rom_start + part_size, self.sectors) - rom_start
+
+            # find the last valid address that's within rom_end and use that
+            # to compute the bootloader size
+            end_address = None
+            for start, stop in part.segments():
+                if (stop < rom_end):
+                    end_address = stop
+                else:
+                    break
+            if end_address == None:
+                raise ConfigException("bootloader segments don't fit within rom region")
+            part_size = Config._align_ceiling(end_address, self.sectors) - rom_start
+
             yield Region("bootloader", rom_start, part_size, False,
                          filename)
             start = rom_start + part_size
@@ -809,9 +820,14 @@ class Config(object):
                 start, region = self._make_header_region(
                     start, self.target.header_format)
                 yield region._replace(filename=self.target.header_format)
+
         if self.target.restrict_size is not None:
             new_size = int(self.target.restrict_size, 0)
             new_size = Config._align_floor(start + new_size, self.sectors) - start
+
+            if self.target.app_offset:
+                start = self._assign_new_offset(rom_start, start, self.target.app_offset, "application")
+
             yield Region("application", start, new_size, True, None)
             start += new_size
             if self.target.header_format and not self.target.bootloader_img:
@@ -821,9 +837,7 @@ class Config(object):
                 start, region = self._make_header_region(
                     start, self.target.header_format)
                 yield region
-            if self.target.app_offset:
-                start = self._assign_new_offset(
-                    rom_start, start, self.target.app_offset, "application")
+
             yield Region("post_application", start, rom_end - start,
                          False, None)
         else:
@@ -832,7 +846,7 @@ class Config(object):
                     rom_start, start, self.target.app_offset, "application")
             yield Region("application", start, rom_end - start,
                          True, None)
-        if start > rom_start + rom_size:
+        if start > rom_end:
             raise ConfigException("Not enough memory on device to fit all "
                                   "application regions")