How it works
Lenders size loans with three ratios. LTV (loan-to-value) compares the loan to today’s value or price. LTC (loan-to-cost) compares it to purchase plus rehab. ARV-LTV compares it to the after-repair value.
Frequently asked questions
What is the difference between LTV and LTC?
LTV divides the loan by the property’s value; LTC divides it by total project cost (purchase plus rehab). On a fix and flip, LTC shows how much of the project the lender funds.
Which ratio matters most on a flip?
Lenders usually cap both: a maximum LTC on the cost side and a maximum ARV-LTV on the value side. The lower result sets your loan.
What ARV-LTV do hard money lenders allow?
Commonly 65–75% of ARV. Ambition Lending caps fix and flip loans at 75% of ARV.
