What if your financing were based on a property’s future value instead of its current condition? Lenders who use the Loan-to-After-Repair-Value (LTARV) make that possible.
LTARV measures the loan amount against the expected value of a property once renovations or construction are complete. This allows lenders to underwrite based on projected value rather than current condition—ideal for value-add, repositioning, or ground-up development projects.
LTARV’s forecasting power means you can seek financing based on a property’s projected worth at completion—which might be several times its current value.
This approach can translate into increased leverage and greater liquidity, especially for value-add, repositioning, or ground-up developments.
However, to take advantage of this approach, you need to understand LTARV and how it’s used.
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What is LTARV?
LTARV isn’t just another acronym—it’s a strategic tool for investors who see a property’s full potential.
While traditional metrics like LTV (current value) and LTC (project costs) focus on today’s numbers, LTARV answers the critical question: How much is this property worth after renovations? And how much can I borrow based on that future value?
Let’s look at why the distinction matters:
- LTV (Loan-to-Value): This measure reflects the property’s current market value. It is useful for static assets but irrelevant for projects needing transformative work.
- LTC (Loan-to-Cost): This covers today’s expenses (purchase and renovation costs) but ignores the profit potential lenders and investors care about.
- LTARV: Focuses on tomorrow’s value, aligning your financing with the asset’s highest-and-best use.
How LTARV is calculated
The LTARV formula is straightforward:
LTARV = Loan Amount ÷ After-Repair Value (ARV)
In other words, LTARV is calculated by dividing the loan amount by the property’s after-repair value.
This projected value, or ARV, comes from a professional appraisal.
Several factors will have a role in this appraisal, such as,
- The full scope of work and construction timeline
- Market data from similar completed properties
- Anticipated income if the plan is to lease the property after completion
- Broader market trends and location-specific outlook
Because the loan is tied to future value, lenders need to see realistic numbers, detailed budgets, and a clear execution plan.
Weak estimates or incomplete documentation can limit leverage or delay approval.
Why is LTARV essential for commercial construction bridge loans?
When traditional lenders base their decisions on a property’s current value, they often limit an investor’s access to capital.
This limited access to capital can stall your project or force you to dilute ownership before value is created.
An LTARV-based construction bridge loan can change the equation, allowing investors to:
- Borrow against the completed value of the asset
- Take on properties with strong future upside
- Minimize upfront equity requirements
- Combine acquisition and construction financing into one loan
By focusing on what a property will become, LTARV financing allows investors to unlock opportunities that traditional lending often overlooks.
How Marquee’s commercial construction bridge loan uses LTARV
Marquee Funding Group uses LTARV as a central part of our underwriting approach.
Our loans are built for hands-on investors who need capital that reflects a project’s true potential—not just present-day numbers.
Here’s how our structure works:
- Up to 75% loan-to-value, based on the current appraised or purchase price
- Up to 75% loan-to-cost, including both soft and hard construction costs
- Up to 70% of the completed appraised value (LTARV)
Our loan terms are designed for flexibility:
- Terms between 12 and 24 months
- Interest-only payments on drawn funds
- Fixed rates, starting at 9.25 percent, depending on asset type and project scope
- Non-recourse options may be available, although personal guarantees often provide access to higher leverage.
Draws are managed by Trinity, a third-party fund control service.
Our process tracks progress against your budget and ensures funds are released according to actual milestones.
This oversight helps keep disbursements on schedule for complex or multi-phase projects, preventing avoidable delays.
When LTARV works to your advantage as a real estate investor
LTARV-based financing favors investors who see more than what’s before them. It rewards vision, planning, and the ability to execute. In the right hands, it becomes a tool for scale.
LTARV financing can create real leverage for a variety of projects, such as:
- Converting outdated commercial buildings into modern retail or office space
- Repurposing warehouses or industrial sites through adaptive reuse
- Building mixed-use projects in fast-growing urban neighborhoods
- Starting ground-up developments in high-demand markets
- Developing in opportunity zones or targeted revitalization areas
In cases like these, completed value often outpaces original cost by a wide margin. LTARV can enable greater access to more capital while keeping equity contributions low and margins intact.
Common mistakes borrowers make with LTARV
LTARV opens doors, but only when used correctly. Missteps can undercut its value and lead to stalled projects or unfavorable loan terms.
The most common issues tend to follow a pattern, so make sure to avoid the following:
- Inflating after-repair value without credible comps or sound market data
- Underestimating total construction costs or leaving critical line items out
- Ignoring soft costs like permits, design work, or holding expenses
- Skipping contingency buffers that protect against delays or overruns
- Misunderstanding fund control and how draw schedules are enforced
How to position your project for LTARV-based financing
An LTARV-based loan rewards planning—the stronger your preparation, the more flexibility you’ll have when negotiating terms.
To position your project effectively:
- Work with a lender who understands construction timelines, drawing schedules, and value-based lending.
- Build a clear scope of work with a detailed, line-item budget and realistic schedule.
- Order a professional appraisal that reflects the property’s projected value after improvements.
- Share a borrower’s resumé that highlights relevant experience and past project success.
- Support your projections with rent comps, market data, and a defined exit strategy, whether you plan to refinance, sell, or lease.
Lenders want proof that your numbers make sense and that you have the experience to follow through.
A complete, credible package sets the tone for better rates, stronger leverage, and fewer surprises during the loan’s life.
Financing for future value with Marquee Funding Group
LTARV isn’t just a formula. It’s a way to fund future potential. Marquee’s Commercial Construction Bridge Loan is built for that kind of thinking.
If you’re planning a project with real potential, this loan gives you the backing to move forward. Submit your loan scenario to Marquee today.
See how today’s LTARV-based financing can support tomorrow’s goals.