What LTV do hard money lenders use — as-is value or ARV?

Bridge and fix-and-flip files are sized against both. As-is LTV caps how much you can borrow on today's condition; ARV caps total leverage against the projected completed value. The lower of LTC, as-is LTV, and ARV cap is the binding constraint on qualified non-owner-occupied files at 8.99%–13.5% IO.

What LTV can investors get on DSCR rental loans?

Qualified DSCR borrowers in select markets can reach up to 85% LTV on purchase, 85% on rate-and-term refinance, and 80% on cash-out — sized on appraised as-is value with executed or market rent, not ARV. Rates run 5.75%–10.5% on stabilized non-owner-occupied collateral.

How do I calculate LTV before submitting a loan file?

Divide the loan amount by the relevant property value and multiply by 100. For bridge rehab, run the math twice — against as-is appraisal and against ARV from sold comps. For DSCR hold, use as-is appraised value only. Compare each result to the lender's published cap.

Blog

Demystifying Loan-to-Value Ratio for Investors

Published June 12, 2026 · Updated July 18, 2026

By Jason Taken · Principal, Jaken Finance Group

LTV for non-owner-occupied hard money and DSCR — as-is vs ARV, purchase vs cash-out caps, worked flip and rental examples, and how lenders size leverage.

Loan-to-value (LTV) is the first leverage number every non-owner-occupied investor should model — yet it is also one of the most misapplied. LTV is simply loan amount divided by property value, expressed as a percentage. What changes across products is which value sits in the denominator: as-is appraisal on a DSCR hold, as-is on a bridge acquisition, or after-repair value (ARV) when rehab is in scope.

Jaken Finance Group sizes 8.99%–13.5% interest-only bridge on qualified investment-property files and 5.75%–10.5% DSCR permanent on stabilized rentals. Both use LTV — but hard money also layers LTC and ARV caps that can bind before a headline LTV percentage ever matters. This guide demystifies LTV for hard money and DSCR, contrasts as-is vs ARV, and walks through worked examples you can paste into a spreadsheet before LOI.

What is a hard money loan · DSCR loans hub · LTC sizing guide.

LTV formula — the baseline every lender uses

LTV = (Loan Amount ÷ Property Value) × 100

Example: $180,000 loan on a $240,000 as-is appraisal → 75% LTV.

Lower LTV means more equity cushion for the lender and more skin in the game for the sponsor. Higher LTV means thinner equity — acceptable only when exit, comps, and carry math still work.

On non-owner-occupied files, LTV is never the only constraint. Hard money underwriters also test loan-to-cost (LTC) against all-in basis and ARV cap against projected completed value. DSCR underwriters test LTV against as-is value plus debt-service coverage from rent.

As-is LTV vs ARV — why the denominator changes

Value basis	Used when	What it measures
As-is	Bridge acquisition, DSCR purchase/refi	Today’s condition per appraisal or BPO
ARV	Fix-and-flip, BRRRR rehab phase	Projected value after scope per sold comps
As-completed	New construction	Finished structure per plans + comps

As-is LTV answers: “How much of today’s value are we lending?” Banks and DSCR lenders anchor here because the collateral exists today — no rehab execution risk in the denominator.

ARV-based leverage answers: “How much of tomorrow’s value are we lending?” Hard money uses ARV because the business plan creates value through rehab. A property worth $140,000 as-is might appraise at $225,000 ARV after a $45,000 scope — the loan is sized against both numbers simultaneously.

Common mistake: quoting “75% LTV” without stating whether that is as-is or ARV. A 75% ARV loan on a $225,000 ARV property allows $168,750 — far more than 75% of the $140,000 as-is value ($105,000). Always label the denominator.

LTV and ARV caps in hard money · How a DSCR loan works.

LTV on hard money bridge — non-owner-occupied only

Hard money bridge at 8.99%–13.5% IO is collateral-first debt on investment property. Underwriters evaluate:

As-is LTV on acquisition — typically capped around 85%–90% of purchase price or as-is value, whichever is lower
LTC against purchase + rehab + soft costs — often up to 90% on qualified files, with select programs higher when economics support risk
ARV cap — total loan usually capped at up to 75% of ARV on fix-and-flip files

The binding constraint is whichever produces the smallest loan. Sponsors who model only one ratio routinely overestimate leverage.

Worked example — fix-and-flip (as-is vs ARV)

Midwest SFR, LLC vesting, non-owner-occupied.

Line	Amount
Purchase price	$155,000
As-is appraised value	$150,000
Rehab scope + 12% contingency	$48,000
All-in project cost	$203,000
ARV (sold comps)	$265,000

Three leverage tests (illustrative policy caps):

Test	Calculation	Max loan
90% LTC	90% × $203,000	$182,700
75% ARV	75% × $265,000	$198,750
85% as-is LTV (acquisition leg)	85% × $150,000	$127,500

Acquisition funding: The as-is cap binds at $127,500 against today’s value — not the full 90% LTC story.

Total stack after rehab draws: If cumulative advances reach $182,700 (90% LTC), check against 75% ARV: 75% × $265,000 = $198,750. Here LTC binds at $182,700 because it is lower than the ARV ceiling.

Sponsor equity required: $203,000 all-in minus $182,700 loan = $20,300 cash to project (plus closing costs and carry).

Monthly IO at 10.5% on $182,700 ≈ $1,599/mo — model 6–9 months hold plus 8% sale costs before you lock scope.

Fix-and-flip loan requirements · 100% LTC program details.

LTV on DSCR permanent — income-based hold debt

DSCR loans at 5.75%–10.5% size on as-is appraised value of stabilized or near-stabilized rentals. ARV is irrelevant unless you are still in bridge phase. Canonical LTV caps for qualified borrowers in select markets:

Transaction	Max LTV
Purchase	Up to 85%
Rate-and-term refi	Up to 85%
Cash-out refi	Up to 80%

Underwriting also requires DSCR ≥ 1.0 (often 1.0–1.25 depending on file) against PITIA at the note rate. A property can meet LTV on paper but fail DSCR if rent is thin — the loan amount drops until coverage clears.

Worked example — DSCR purchase LTV

Turnkey duplex, non-owner-occupied, LLC.

Line	Value
Purchase price	$320,000
As-is appraisal	$315,000
Target LTV	80%
Max loan at 80% LTV	$252,000
Gross rent (both units)	$3,400/mo
PITIA at 7.25% P&I	~$2,580/mo
DSCR	1.32

At 80% LTV the file clears DSCR. Pushing to 85% LTV → $267,750 loan → PITIA ~$2,740 → DSCR ~1.24 — still viable on many desks.

Cash-out refi at 80% max LTV: appraised value $340,000 after six months of seasoning → max loan $272,000. Existing balance $252,000 → $20,000 cash out before closing costs — not the full equity cushion novices expect.

DSCR vs hard money vs conventional · Private money vs hard money.

BRRRR stack — LTV shifts from ARV to as-is

BRRRR (buy, rehab, rent, refinance, repeat) uses two different LTV frameworks in sequence:

Phase 1 — Bridge: Size on LTC + ARV cap while property is distressed. IO carry at 8.99%–13.5%.

Phase 2 — DSCR refi: Size on as-is LTV after rehab is complete and lease is executed. Permanent rate at 5.75%–10.5%.

Phase	Denominator	Typical cap	Product
Bridge	ARV + LTC	75% ARV / 90% LTC	Hard money IO
Permanent	As-is appraisal	80%–85% LTV	DSCR P&I

Refi surprise happens when ARV pro forma overshoots the as-is appraisal at lease-up — or when rent supports only 75% LTV DSCR while bridge payoff needs 80%. Model ARV −10% and DSCR at 0.95 before you bind bridge terms.

Worked BRRRR — bridge ARV to DSCR as-is

Line	Amount
Purchase + rehab all-in	$207,000
ARV	$265,000
Bridge loan (90% LTC)	$186,300
Post-rehab as-is appraisal	$255,000
DSCR max at 80% LTV	$204,000

Bridge payoff $186,300 fits inside $204,000 refi capacity — $17,700 equity left in deal after refi, plus closing costs. If appraisal came in at $240,000 instead, 80% LTV = $192,000 — shortfall vs $186,300 payoff is tight; cash-in or rate buy-down may be required.

Factors that move your LTV ceiling

Property type. SFR and 2–4 unit non-owner-occupied files fit standard matrices. Manufactured homes, mixed-use, and commercial asset classes carry different LTV grids — always confirm asset-class policy before LOI.

Sponsor experience. First-time flippers may see tighter ARV caps or lower LTC than repeat borrowers with documented exits.

Market liquidity. Thin comp pools force conservative ARV adjustments — which lowers ARV-based max loan even when LTC math looks generous.

Condition and scope risk. Heavy gut rehabs trigger lower ARV caps than cosmetic turns because execution risk is higher.

Rent strength (DSCR only). Strong in-place lease supports higher loan at a given LTV because DSCR clears. Vacant purchase with pro forma rent faces more conservative underwriting.

Red flags — hard money lenders to avoid · Hard money loan application process.

Practical checklist — model LTV before LOI

Identify product — bridge IO vs DSCR P&I determines which value basis applies
Pull sold comps — anchor ARV and as-is with third-party support, not list price
Run all three hard money tests — LTC, ARV cap, as-is LTV on acquisition leg
Run DSCR — max LTV cap AND coverage at that loan amount
Stress test — ARV −10%, +1 month IO carry, DSCR at 0.95
Document exit — sale pro forma or executed lease for refi path

Investors who reconcile LTV across as-is and ARV before submission close faster — underwriters are not negotiating leverage from a one-ratio spreadsheet.