What is Loan-to-Cost Ratio (LTC)?
Loan-to-cost ratio, or LTC, compares a project’s financing to the cost of construction. Along with loan-to-value ratio, or LTV, LTC is one of the most important metrics that lenders look at when deciding whether to approve a HUD multifamily construction loan, like the HUD 221(d)(4) loan.
What is Leverage?
Leverage is an investment strategy using borrowed money to finance assets and increase returns. It can also refer to the amount of debt used in financing an asset.