Loan-to-value ratio

If the loan is large relative to value, LTV is high. If the loan is small relative to value, LTV is low. Lenders and mortgage-insurance decisions often look at LTV. Combined LTV, which folds in other liens, is a different future term. Some USDA program materials define LTV inside Rural Development rules. That is program math. It does not become this definition. Freddie Mac is not a source on this page.

Value in the denominator may be a purchase price or an appraised value depending on the transaction. This canary does not pick a single valuation rule. USDA handbook LTV, if mentioned at all, is program context only.

Profile and data conversations use LTV as leverage shorthand. A glossary that printed a max LTV, or cited an unverified GSE heading, would overclaim.

A $240,000 loan on a $300,000 value is an LTV of 80% (240,000 ÷ 300,000). The example does not say whether 80% is acceptable, and it does not introduce a second lien.

• Debt-to-income ratio
• Private mortgage insurance

NONE REQUIRED