LTV (loan-to-value) is loan amount divided by appraised value. LTC (loan-to-cost) is loan amount divided by total project cost (acquisition + capex + carry ). LTV is used for acquisitions and stabilized refis. LTC is used for construction and value-add where 'value' is not yet established.
Why does the distinction matter?
On a stabilized refi, LTV is the right test because the property has a defensible market value. On a construction project, value is forecast not actual; LTC is the disciplined test because it ties leverage to dollars actually invested.
On a value-add, both tests usually apply: LTC at closing (loan vs. acquisition + planned capex) and as-stabilized LTV at the lender's projected stabilized value. Both must be satisfied.
Typical maximums (2026)
Stabilized agency multifamily: up to 75% LTV. Stabilized CMBS/life co: 60% to 70% LTV. Bank construction: 60% to 70% LTC. Debt fund construction: 70% to 80% LTC. Bridge value-add: 70% to 80% LTC at closing, 70% to 75% as-stabilized LTV.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Delegated Underwriting and Servicing (DUS) program disclosures · Fannie Mae · current