Bridge & Construction

Loan-to-Cost (LTC) Ratio

The total loan amount divided by total project cost (Purchase Price + Documented Rehab Budget).

Underwriting Formula / Rule

LTC = (Initial Acquisition Advance + Rehab Holdback) ÷ (Purchase Price + Rehab Budget).

Detailed Credit-Committee Impact & Thresholds

Fix-and-flip, bridge, and ground-up construction lenders underwrite both Loan-to-Cost (LTC) and Loan-to-After-Repair-Value (LTARV) to ensure the investor has skin in the game while funding up to 100% of vertical renovation costs.

2026 Wholesale Benchmark: Up to 85%–90% LTC for experienced operators (3+ completed flips in 36 months).

Related Underwriting Terms

Debt Service Coverage Ratio (DSCR)Form 1007 Single-Family Comparable Rent Schedule Form 1025 Small Residential Income Property Appraisal Report 5-4-3-2-1 Step-Down Prepayment Penalty 3-2-1 Step-Down Prepayment Penalty Yield Maintenance Prepayment Provision