what is the loan to cost ltc ratio 
the loan to cost ltc ratio is a metric used in commercial real estate construction to compare the financing of a project as offered by a loan with the cost of building the project the ltc ratio allows commercial real estate lenders to determine the risk of offering a construction loan it also allows developers to understand the amount of equity they retain during a construction project similar to the ltc ratio the loan to value ltv ratio also compares the construction loan amount but with the fair market value fmv of the project after completion formula for ltc loan to cost loan amount construction cost begin aligned text loan to cost frac text loan amount text construction cost end aligned loan to cost construction costloan amount 