ARLTV (Loan-to-After-Repair-Value)
The loan amount divided by the projected after-repair value, as a percentage. ARLTV caps total exposure on a fix-and-flip loan — usually 65–75% of ARV — working alongside loan-to-cost.
ARLTV — after-repair loan-to-value — is the ratio of the total loan amount to the property's projected after-repair value (ARV), expressed as a percentage:
ARLTV = Total Loan Amount ÷ ARV
It's the leverage metric that caps total exposure on a fix-and-flip or rehab loan against what the property will be worth finished. Where loan-to-cost (LTC) limits the loan relative to your cost, ARLTV limits it relative to the finished value — and lenders apply both.
The two-cap system (again)
Rehab lenders underwrite to two ceilings simultaneously, lending the lower of:
- LTC — a percentage of purchase + rehab (often up to ~90% of purchase, 100% of rehab).
- ARLTV — a percentage of the projected ARV (commonly 65–75%).
ARLTV is the backstop: it ensures the lender's total advance stays safely below the property's finished value, protecting them even if the project goes sideways. Whichever cap produces the smaller loan governs.
A worked example
| Item | Amount |
|---|---|
| Purchase | $200,000 |
| Rehab | $50,000 |
| Total cost | $250,000 |
| ARV | $350,000 |
| LTC cap (e.g. 92%) | $230,000 |
| ARLTV cap (70% of ARV) | $245,000 |
| Loan = lower of the two | $230,000 |
Here LTC binds. But if the rehab were cheaper relative to ARV, ARLTV could become the binding cap. On a deal where you're buying very cheap relative to ARV, the ARLTV ceiling is often what limits how much the lender will lend.
Why ARLTV matters to investors
- It mirrors the 70% rule. Most lenders' ~70% ARLTV cap is the same discipline that protects your profit — buy and finance below ~70% of ARV and there's room for costs and margin.
- It rewards a strong ARV — within reason. A higher (well-supported) ARV raises the ARLTV ceiling, allowing a larger loan. But the lender's appraisal sets the ARV, so an inflated estimate won't stretch ARLTV.
- It interacts with your cash in the deal. When ARLTV is the binding cap, you bring more cash; when LTC binds, ARLTV gives headroom. Knowing which constrains your deal tells you your true cash-to-close.
ARLTV vs. plain LTV
Don't confuse ARLTV with ordinary LTV. LTV uses current value (as-is or appraised); ARLTV uses projected after-repair value. ARLTV only appears on rehab/construction loans where there's a future value to lend against; a straight rental purchase or DSCR refinance uses standard LTV on the current value.
Practical takeaway
When you shop a fix-and-flip loan, get both the LTC and ARLTV caps and run your specific numbers to see which binds — that determines your loan size and cash required. Underwrite your ARV conservatively (the lender will), keep your all-in financing under ~70% of a realistic ARV, and ARLTV becomes an ally that confirms the deal has margin rather than a surprise that shrinks your loan at closing.
Frequently asked questions
What is ARLTV on a fix-and-flip loan?
After-repair loan-to-value — the total loan amount divided by the projected after-repair value (ARV), usually capped at 65–75%. It limits the lender's total exposure relative to the finished value. Fix-and-flip lenders apply it alongside loan-to-cost and lend the lower of the two caps.
What's the difference between ARLTV and LTC?
ARLTV caps the loan against the projected after-repair value (the finished value), while loan-to-cost caps it against your purchase plus rehab cost. Lenders use both and lend whichever produces the smaller loan. ARLTV is the backstop ensuring total advances stay safely below what the property will be worth.
How is ARLTV different from regular LTV?
Regular LTV uses the property's current value (as-is or appraised), while ARLTV uses the projected after-repair value. ARLTV only applies to rehab and construction loans, where there's a future value to lend against. A straightforward rental purchase or DSCR refinance uses standard LTV on the current value instead.