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Commercial Loan-to-Value (LTV) Calculator

Loan-to-value ratio (LTV) is one of the primary metrics commercial lenders use to size a loan. Use our LTV calculator to determine your current LTV or find the maximum loan amount for a target LTV.

LTV Calculator

LTV is the ratio of the loan amount to the appraised value of the property. Lenders use LTV to measure risk — a lower LTV means more equity and less risk for the lender. Fill out the fields below to calculate your LTV, or enter a target LTV to find the maximum loan amount. Most conventional commercial loans are capped at 65–75% LTV.

LTV = Loan Amount / Property Value
%

Note: The commercial mortgage calculators displayed in this website should be used as a guideline and do not represent a commitment to lend. Commercial Loan Direct and CLD Financial, LLC are not liable for any calculation errors resulting from the use of these calculators.

How to Use the LTV Calculator

  1. Enter the appraised or purchase value of the property.
  2. Enter the loan amount you are requesting or considering.
  3. Optionally, enter a target LTV percentage to automatically calculate the maximum loan amount at that leverage level.
  4. Review the LTV result and compare it to lender requirements for your loan program.

The LTV that works for your deal depends on the property type, loan program, and lender. See the program-by-program breakdown below.

LTV Formula Explained

Loan-to-value ratio is calculated as Loan Amount / Property Value × 100. Most lenders use the lesser of the appraised value or purchase price when determining LTV. Improvements, renovation costs, or future value projections may be considered under certain bridge or construction loan programs.

What Drives LTV Limits

  • Property type: Multifamily typically allows higher LTV than office or retail.
  • Occupancy and cash flow: Stabilized properties support more leverage than value-add or vacant assets.
  • Loan program: Government-backed programs (FHA/HUD, SBA) permit higher LTVs than conventional loans.
  • Market: Primary markets often receive higher LTV allowances than secondary or tertiary markets.
  • Borrower strength: Experienced sponsors with strong credit may access higher leverage tiers.

Maximum LTV by Commercial Loan Program

Loan Program Property Type Typical Max LTV Notes
Conventional / Bank All commercial 65–75% Varies by lender; lower for construction and land
CMBS (Conduit) Office, retail, industrial, multifamily, hotel 65–75% Typically capped at 75%; stricter post-2020; DSCR and debt yield constraints often bind first
Life Company Core commercial assets 55–65% Conservative leverage; best pricing for low-LTV, stabilized deals
Fannie Mae (Agency Multifamily) Multifamily (5+ units) Up to 80% 80% for affordable housing; 75% for market rate; lower in tertiary markets
Freddie Mac (Agency Multifamily) Multifamily (5+ units) Up to 80% Similar to Fannie; SBL program up to 80% LTV for smaller loans
FHA / HUD 223(f) Multifamily (acquisition/refinance) Up to 87% 83.3% for market rate; 87% for affordable; longest fixed-rate amortization available
FHA / HUD 221(d)(4) Multifamily (new construction) Up to 87% 85% for market rate; 87% for affordable; non-recourse with Davis-Bacon wage requirements
SBA 7(a) Owner-occupied commercial Up to 90% Real estate component up to 90%; requires owner occupancy (51%+)
SBA 504 Owner-occupied commercial Up to 90% Bank (50%) + CDC debenture (40%) + borrower equity (10%); 10% down for most deals
USDA B&I Rural commercial Up to 80% Business & Industry loans in rural areas; government guarantee reduces bank risk
Bridge / Transitional All types (value-add, lease-up) 70–80% Often based on stabilized or future value; recourse; higher rates
Hard Money All types 60–70% Asset-based lending; less emphasis on borrower credit; fastest execution
Construction Loans All types 65–75% of cost Usually based on total project cost, not appraised value; full recourse typical
Mezzanine / Preferred Equity All types Up to 85–90% (total stack) Sits behind senior debt; fills gap between senior LTV and total capitalization

Optimal LTV by Property Type

  • Multifamily: Widest range of programs. Agency financing (Fannie/Freddie) allows up to 80% LTV; FHA/HUD goes higher. Target 75% or below for best conventional pricing.
  • Office: Most lenders are conservative post-pandemic. CMBS and bank lenders typically cap at 65–70% LTV for office. Life companies may go lower.
  • Retail: Anchored retail can reach 70–75% LTV with CMBS or conventional. Unanchored or single-tenant retail may face tighter constraints.
  • Industrial / Warehouse: Strong asset class with relatively broad lender appetite; 65–75% LTV achievable with most programs.
  • Hospitality: Hotel financing typically caps at 60–65% LTV with CMBS; bridge lenders may go higher for flagged, stabilized properties.
  • Self-Storage: Conventional and CMBS programs typically allow 65–75% LTV for stabilized facilities.
  • Owner-Occupied / SBA: The highest LTV is available here — up to 90% with SBA 504 or 7(a), making these programs ideal for business owners buying their operating premises.

How to Improve Your LTV Position

  • Increase the down payment or add equity from a partner or preferred equity investor.
  • Pursue a government-backed program (FHA, SBA) if the property and use qualify.
  • Add a mezzanine loan or preferred equity tranche to bridge the gap between senior LTV and your target capitalization.
  • Improve NOI before applying — a stronger income stream can support a higher appraised value, effectively lowering the LTV at the same loan amount.
  • Request a higher appraised value by providing stronger comparable sales or income data to the appraiser.

LTV Benchmarks

  • < 55%: Very conservative; life company territory
  • 55–65%: Conservative; best pricing from most programs
  • 65–75%: Standard range for conventional and CMBS
  • 75–80%: Agency multifamily, some bridge programs
  • 80–87%: FHA/HUD multifamily programs
  • 87–90%: SBA 7(a) / 504 (owner-occupied only)

LTV FAQs

Is LTV calculated on purchase price or appraised value?
Lenders use the lesser of the two. If you pay more than appraised value, LTV is calculated on appraised value.

Does LTV affect the interest rate?
Yes. Lower LTV generally means lower risk and better pricing. Many programs have rate tiers that improve at 65% and 55% LTV.

What is CLTV?
Combined LTV (CLTV) includes all liens — senior debt, mezzanine, and preferred equity — as a percentage of property value.

Can LTV exceed 80% for commercial properties?
Rarely through conventional lending. FHA/HUD and SBA programs are the primary routes to 80%+ LTV on commercial real estate.

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