What is Loan-to-Value Ratio (LTV)?

Loan-to-Value Ratio in Relation to HUD 232 Financing

Loan-to-value ratio, or LTV, can be calculated by taking the amount of a loan and dividing it by the value of the underlying asset. LTV is one of the major ways that both lenders and HUD calculate the leverage for, and corresponding risk of a potential HUD 232 loan borrower. In general, the maximum LTV allowed for HUD 232 loans varies between 75% and 85%, depending on the exact type of HUD 232 loan in question.

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