What LTV Ratios Are Typical for Hard Money Loans?

Hard money lenders are conservative on LTV compared to conventional mortgage programs — because the loan is primarily secured by the asset and the lender needs sufficient equity cushion to recover their capital in a default scenario.

Typical LTV Ranges

• Purchase transactions: 65%–75% of as-is property value
• Refinance transactions: 60%–70% of as-is value
• Fix and flip (based on ARV): Up to 65%–70% of after-repair value
• Commercial or land: Generally lower — 50%–60%

Why LTV Is Conservative

Hard money lenders are taking on more risk than conventional lenders — they are lending on properties that may be in poor condition, to borrowers who may have credit challenges, and closing fast without full conventional due diligence timelines. The lower LTV is the primary risk management tool that protects both lender and borrower.

How LTV Affects Your Down Payment

At 70% LTV on a $400,000 purchase, you would need to bring $120,000 (30%) to closing. This is significantly more than the 3%–20% typically required for conventional or FHA financing, which is why hard money is best suited for investors with available capital.

Cross-Collateralization

Some hard money lenders will consider cross-collateralizing multiple properties to increase the effective LTV on a transaction. This allows experienced investors with a portfolio of properties to leverage equity across multiple assets.

LTV examples across loan types (illustrative example, not a quote)

The percentages come from the ranges on this page. In every case the lender caps the loan at its percentage of the value it uses, so a lower appraisal reduces the loan dollar for dollar at that percentage.

Mistakes that distort the cash-needed math

• Confusing LTV with loan-to-cost. A renovation loan can be limited by both the cost and the ARV, as our loan amount guide explains.
• Forgetting costs outside the loan, such as points, title, escrow, insurance and interest reserves.
• Assuming your price is the value. The lender’s valuation may be lower than what you paid.

Ways to improve your position

• Bring a strong valuation case with recent nearby sales.
• Choose properties where the discount to value is real, not hoped for.
• Ask about using other equity as additional collateral, which some lenders allow for experienced investors.
• Build a track record, because experience can affect leverage.

Reading a lender’s LTV quote

When you receive a quote, ask three things: which value the percentage applies to (as-is or ARV), whether renovation funds are inside or on top of that percentage, and whether the percentage changes with your experience or credit. Two quotes that both say 70% can produce very different loan amounts if they are measured against different values.

Frequently asked questions

Does a lower LTV mean a lower rate?

Generally yes. A larger equity cushion lowers the lender’s risk, and pricing often reflects that. Compare options at different LTV levels.

Does the lender use my purchase price or the appraised value?

This depends on the lender and the loan type, so ask which value drives the loan amount before you commit to a price. We confirm the method for your scenario.

Can I use equity in another property instead of cash?

Some lenders consider cross-collateralizing a second property. It adds a lien on that property, so review the risk carefully with an attorney.

Related guides

• How fix and flip loan amounts are calculated
• Hard money rates and fees
• What is a hard money loan
• When hard money makes sense
• Financing multiple flips at once