LTC (Loan-to-Cost) is the loan amount divided by the total project cost (purchase + rehab + closing costs). Expressed as a percentage. Used for fix-and-flip and ground-up construction where the loan funds work that hasn't happened yet.
A fix-and-flip at 85% LTC means the lender funds 85% of purchase + 100% of approved rehab, with the borrower contributing the remaining 15% down + reserves. New construction LTC typically caps at 70–85% of total project including land.
LTC is paired with LTARV: a loan can be approved at 85% LTC but capped to the lower of that or 70% LTARV. The effective leverage is the binding cap.