Construction Tool
LTC Calculator
Calculate Loan-to-Cost ratio for construction, renovation, and value-add projects. See maximum financing based on total project cost including land, hard costs, and soft costs.
- 65–80%Typical Max LTC
- Loan ÷ CostLTC Formula
- Dev/RenoUse Case
Loan-to-Cost Ratio
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Total Project Cost
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Max Loan at Target LTC
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Required Equity
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Equity Gap / Surplus
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Apply with these numbers
Need construction or value-add financing? Our advisors connect you with construction lenders, bridge lenders, and SBA options.
Scenario A vs. B
A is saved. Change any input above and B updates — the difference shows on the right.
| Result | A saved | B now | B − A |
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Understanding Loan-to-Cost
LTC is the key leverage metric for development and renovation projects.
What Counts as Total Cost?
Total project cost includes: land acquisition, hard costs (construction, materials, labor), soft costs (architecture, engineering, permits, legal), interest reserves, contingency reserves, and developer fees. Lenders may exclude some soft costs from their LTC calculation. If you buy the land before the construction loan closes, a land loan can finance it until then.
Construction Loan LTC Limits
Ground-up construction: 60–75% LTC. Value-add renovation: 70–85% LTC. Bridge loans: 75–80% LTC. SBA 504 (owner-occupied new construction): up to 90% LTC. Higher LTC means less equity required but typically higher rates.
LTC with Mezzanine / Preferred Equity
To exceed standard LTC limits, developers use mezzanine debt or preferred equity to fill the gap between senior debt and their own equity. A project might have 65% LTC senior debt + 15% mezzanine = 80% combined leverage, requiring only 20% sponsor equity.
Max LTC by Financing Type
Different lenders and programs allow different leverage on project costs.
| Financing Type | Max LTC | Typical Use | Equity Required |
|---|---|---|---|
| Construction Loan (Bank) | 65–75% | Ground-up development | 25–35% |
| Bridge / Renovation | 75–85% | Value-add, repositioning | 15–25% |
| SBA 504 (New Construction) | Up to 90% | Owner-occupied new build | 10% |
| Hard Money Construction | 70–80% | Quick close, fix & flip | 20–30% |
| Mezzanine + Senior | 80–90% | Larger projects $5M+ | 10–20% |
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Frequently Asked Questions
Common questions about LTC and construction financing.
What is the difference between LTC and LTV?
LTC (Loan-to-Cost) divides the loan by total project cost. LTV (Loan-to-Value) divides the loan by the appraised value after completion. For new construction, LTC is primary since there's no existing building to appraise. After stabilization, lenders switch to LTV for permanent financing.
What is included in total project cost?
Total project cost = Land + Hard Costs (construction, materials, labor) + Soft Costs (permits, design, legal, interest reserves, contingency). Some lenders exclude certain soft costs. Ask your lender exactly what they include in their LTC calculation.
What LTC can I get for a construction loan?
Bank construction loans: 65–75% LTC. Bridge renovation loans: 75–85%. SBA 504 for owner-occupied new construction: up to 90%. Hard money: 70–80%. Higher LTC requires stronger sponsorship, pre-leasing, and sometimes personal guarantees.
Can I get 100% financing for construction?
Not from a single source, but you can layer capital. Example: 65% senior construction loan + 20% mezzanine debt + 15% preferred equity = 100% of costs financed. However, the total cost of capital will be higher, and you'll have less control.
How do I qualify for a construction loan?
Lenders evaluate: sponsorship experience (track record of similar projects), equity contribution, pre-leasing or pre-sales, project feasibility, market conditions, and personal net worth. First-time developers typically need more equity and may benefit from SBA programs.
How does BestLoanUSA help with construction financing?
We connect you with construction lenders, bridge lenders, and SBA programs that match your project type and experience level. We help prepare lender-ready project budgets and proformas. Our advisory is free — we are compensated by the lender at closing.
Build It. Finance It. Profit.
Our advisors structure construction and value-add financing to maximize your leverage while meeting lender requirements.
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