What is Loan-to-Cost Ratio (LTC)?
Loan-to-Cost Ratio, or LTC, is a measure of leverage defined as project’s financing compared to its construction costs. LTC is important for some kinds of HUD multifamily financing , including HUD 221(d)(4) loans and HUD 232 loans , but is not a relevant factor for HUD 223(f) loans , since thes
What is Loan-to-Value Ratio (LTV)?
A loan-to-value or LTV ratio is a metric that compares the size of a loan to the value of the asset. Higher LTVs are generally riskier for lenders, and, for certain loans, can result in higher interest rates. When it comes to HUD 223(f) loans , HUD permits up to 85% LTV for market rate p
What is Leverage?
Leverage can be defined as the practice of financing assets with borrowed money. It also refers the amount of debt used to finance an asset. The asset is typically used as collateral for the purchase.