Questions to Ask About LTV Before Taking Multifamily Bridge Financing

Understanding the LTV percentage is useful, but investors should also understand what that percentage is actually based on. Before pursuing multifamily bridge financing, borrowers can ask the lender how property value is determined, which valuation is being used, and how the resulting LTV affects the proposed loan amount.

One important question is whether the lender is using the property's current condition or considering its projected stabilized value. This can be particularly relevant for a building that is being renovated, repositioned, or brought back to stabilized occupancy. Investors should also understand whether comparable sales, operating performance, or other valuation factors are considered.

Another useful question concerns the relationship between LTV and LTC. For multifamily real estate loans involving both acquisition and renovation, these measurements can produce different views of the financing. LTV compares the loan with property value, while LTC compares the loan with total project cost. Knowing which metric is being used for each part of the transaction can help investors understand their equity requirements.

Finally, investors can ask how property condition, location, existing income, property type, and the overall transaction structure affect the financing. InstaLend's multifamily bridge program provides up to 80% LTC, with loans from $500,000 to $10 million or more and terms of 12–24 months. Asking these questions before relying on a projected loan amount can help investors build a more accurate picture of the capital needed for the transaction.