What is Loan-to-Cost Ratio (LTC)?

Loan-to-Cost Ratio (LTC) and the HUD 223(f) Loan Program

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 these loans do not fund property construction or rehabilitation.


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