100% Loan-to-Cost Financing: What It Is, How It Works, and How to Qualify
Most hard money lenders talk about loan-to-value ratios. At REIA Hard Money, we talk about loan-to-cost — and the difference between those two numbers is where most investors either gain a major advantage or leave significant money on the table.
If you've ever wondered how much cash you actually need to bring to a fix-and-flip deal, this post is going to answer that question clearly and completely.
LTV vs. LTC: Understanding the Difference
Before we get into how our program works, it helps to understand two terms that often get confused — even by experienced investors.
Loan-to-Value (LTV) is the loan amount expressed as a percentage of the property's current value or after-repair value. A lender offering 75% LTV on a property with a $200,000 ARV would lend up to $150,000. This sounds straightforward, but LTV doesn't tell you anything about what's covered during the renovation itself — it only tells you what the lender will lend against the finished value.
Loan-to-Cost (LTC) is the loan amount expressed as a percentage of your total project cost — meaning the purchase price plus your renovation budget combined. This is the number that actually tells you how much cash you need to bring to the table.
Here's why that distinction matters: a lender could offer 75% LTV on a $240,000 ARV property, which sounds like a $180,000 loan. But if your purchase price is $120,000 and your renovation budget is $45,000, your total project cost is $165,000. At 100% LTC, your lender covers the full $165,000. At 75% LTV, they might cover $180,000 on paper — but how that applies to your actual purchase and renovation costs depends entirely on how the loan is structured.
LTC cuts through the confusion. It tells you exactly what percentage of your real project expense is funded.
How 100% LTC Works at RHM
At REIA Hard Money, 85–90% of our loans are structured at 100% loan-to-cost through our Pro and Pro V programs. That means we fund the full purchase price and the full renovation budget for the vast majority of our borrowers.
This isn't a teaser rate or a limited-time promotion. It's how our programs are designed — because we believe capable investors with strong deals shouldn't be limited by how much cash they happen to have sitting in an account.
A Real Deal Example
Let's walk through exactly what 100% LTC looks like on a realistic deal:
| Line Item | Amount |
|---|---|
| Purchase Price | $120,000 |
| Renovation Budget | $45,000 |
| Total Project Cost | $165,000 |
| After-Repair Value (ARV) | $240,000 |
| RHM Funds (100% LTC) | $165,000 |
| Borrower Cash Required on Purchase + Reno | $0 |
Your out-of-pocket exposure on the two most capital-intensive parts of the deal — purchase and renovation — is zero.
You are still responsible for:
- Closing costs (title, escrow, recording fees, etc.)
- Carrying costs during the hold period (loan interest, property taxes, insurance, utilities)
- Any cost overruns beyond your approved renovation budget
But the core capital requirement — the part that stops most investors from scaling — is covered.
What This Unlocks for Your Portfolio
The real power of 100% LTC financing isn't just what it does for one deal. It's what it does for your business over time.
It removes the liquidity bottleneck. Without 100% LTC financing, every deal you do ties up capital. You need a down payment for the purchase, you need to front renovation costs, and you're waiting to get reimbursed through draws. That cycle limits how many deals you can run simultaneously and how quickly you can scale.
It shifts your limiting constraint. When we fund 100% of your project cost, the thing that limits your deal flow is no longer your bank account balance — it's your ability to find and evaluate quality deals. That's a fundamentally better problem to have.
It makes you more competitive. When you don't need to raise capital for each deal, you can move faster. You can make offers with confidence, close quickly, and take on deals that other investors can't execute because they're waiting on capital.
Pro vs. Pro V: Which Program Is Right for You?
Our 100% LTC financing is available through two tiers:
RHM Pro
Our Pro program is designed for experienced investors with at least one completed fix-and-flip deal under their belt. If you have a track record, a clear scope of work, reliable contractor relationships, and the liquidity infrastructure to cover closing and carrying costs, Pro is likely the right fit.
- 100% LTC on qualifying deals
- Competitive interest rates
- Streamlined underwriting and fast close timelines
- Full draw management support
RHM Pro V
Pro V is our top-tier program for high-volume or consistently high-performing borrowers. If you're closing multiple deals per year, delivering strong returns, and building a proven track record with RHM, Pro V offers our best available terms.
- Everything in Pro, plus enhanced rate structure
- Priority underwriting and processing
- Dedicated relationship management
- Designed for investors building serious portfolio velocity
Not sure which tier you qualify for? Start with pre-approval and we'll walk you through where you land and what path gets you to Pro V if you're not there yet.
What You Need to Qualify
100% LTC financing isn't available to every borrower on every deal — and it shouldn't be. Here's what we're looking for:
A Deal with Strong Fundamentals
The numbers have to work. We evaluate purchase price relative to ARV, neighborhood trajectory, property condition, and whether the renovation scope and budget are realistic for the market. We won't fund a deal where the math doesn't hold up — for your sake as much as ours.
A general rule of thumb: if your total project cost (purchase + renovation) is at or below 70% of your ARV, you're in strong territory. If it's pushing above 75–80%, the deal needs to be evaluated more carefully.
Demonstrated Capacity
This is the piece most borrowers underestimate. Capacity isn't just about experience — it's about having the financial infrastructure to handle the costs that fall outside the loan.
Specifically, we want to see:
- Access to liquid funds for closing costs and carrying costs
- Credit infrastructure: a business credit card with meaningful limits, Pro trade accounts at Home Depot or Menards, or a HELOC on your primary residence
- The ability to bridge gaps between draw reimbursements without stalling your project
If you've read our earlier post on building credit and liquidity infrastructure, this is exactly where that preparation pays off.
Experience or Thorough Preparation
We work with first-time investors — but we want to see that you've done your homework. A clear, itemized scope of work, contractor relationships and bids in hand, and a realistic project timeline go a long way toward demonstrating readiness.
First-timers who come in prepared often qualify faster than experienced investors who show up without a plan.
What Happens If You're Not at Pro Level Yet?
If you're early in your investing journey and don't yet qualify for our Pro or Pro V programs, don't let that stop you from reaching out. We have loan structures for borrowers at every stage, and your first deal with RHM is how you start building the track record that opens the door to 100% LTC financing on subsequent deals.
Most borrowers who come in at a standard structure are in our Pro program by their second or third deal. The path is shorter than you might think.
The Bottom Line
100% loan-to-cost financing changes the fundamental math of real estate investing. It removes the capital constraint that holds most investors back from scaling, and it shifts the limiting factor in your business from "how much cash do I have" to "how good are the deals I'm finding."
If you're working deals in our market and you haven't yet explored what your project looks like under a 100% LTC structure, that conversation costs you nothing and could change everything about how you approach your next deal.
Get your project
funded today!
