Bridge Loan Sizing Explained: How LTV, LTC and ARV Caps Set Your Loan Amount

Every bridge and fix-and-flip term sheet is built from three ratios: how much of the purchase price the lender will advance, how much of the total project cost it will fund, and how much of the after-repair value (ARV) it will allow the loan to reach. The lender calculates all three and lends the smallest result. Knowing which one binds on your deal tells you how much cash you need at closing before you ever apply.

This guide walks through the formulas, then sizes four sample deals using terms that Kiavi, RCN Capital, Lima One Capital, Easy Street Capital, and CoreVest Finance publish on their own websites (checked October 2026, linked in the sources section). Published maximums are ceilings for the strongest files. Your quote depends on credit, experience, property, and market.

The Three Ratios Defined

Lenders word these caps differently, and the wording matters. Kiavi describes its structure as up to 90% of the purchase price plus 100% of the rehab budget, subject to a 75% ARV cap (Kiavi blog). Easy Street Capital lists 90% of purchase plus 100% of rehab, with a total limit of 93% LTC and 75% of ARV (Easy Street EasyFix terms). Lima One quotes up to 95% LTC and 75% loan-to-ARV with 100% of the rehab budget (Lima One FixNFlip). A "90% of purchase" cap and a "90% of total cost" cap produce different loans on the same deal, as the examples below show.

Published Caps From Five National Lenders

Kiavi's pages are not consistent with each other: its blog and broker page describe 90% of purchase with a 75% ARV cap, while its current bridge loan page advertises up to 100% of purchase and 80% of ARV (Kiavi bridge loans). Treat the higher figures as the top tier and the blog structure as the more common case until you see a term sheet.

Example 1: Light Rehab Where the Purchase Advance Binds

Purchase price $300,000. Rehab budget $60,000. Total cost $360,000. Appraised ARV $480,000. The rehab is 20% of the purchase price.

On a cheap rehab with plenty of ARV headroom, the purchase advance decides the loan. Moving from RCN's 0 flip tier to its 1 to 4 flip tier cuts the down payment from $45,000 to $30,000. RCN defines light rehab as a budget of 2.5% to 50% of the initial value, moderate rehab as 50.01% to 100%, and heavy rehab as more than 100% of initial value or a project that adds more than 20% to the square footage or changes the use (RCN loan programs).

Example 2: Bigger Rehab Where the ARV Cap Binds

Purchase $400,000. Rehab $150,000 (37.5% of purchase, still light rehab under RCN's definition). Total cost $550,000. ARV $650,000.

Total cost here is 84.6% of ARV, so every lender with a 75% ARV cap lands on the same $487,500 regardless of its headline LTC. The 95% LTC offer adds nothing on this deal. When your purchase plus rehab sits above about 75% to 80% of ARV, compare lenders on ARV cap, rate, and fees, because the LTC number will not change your loan.

A quick way to know in advance: divide total cost by ARV. If the result is above the lender's ARV cap divided by its LTC cap (for Easy Street, 75% / 93% = 80.6%), the ARV cap will bind.

Example 3: Heavy Rehab and Experience Tiers

Purchase $200,000. Rehab $220,000 (110% of purchase, so heavy rehab under RCN's definition). Total cost $420,000. ARV $600,000. RCN's single-family tier table for heavy rehab (RCN loan programs):

Heavy rehab tightens both caps. A first-time investor brings twice the cash of a 5+ flip investor on the identical property. If you are new and the project is a gut renovation, partnering with an experienced operator whose track record counts toward the tier can change the loan more than shopping rates.

Example 4: Light or No Rehab Bridge Sized on Cost and Value

CoreVest's Single Asset Bridge Loan for 1 to 4 unit rentals advertises up to 100% of cost, limited to 75% of value, with loans from $75K to $2M+ and no DSCR requirement (CoreVest bridge loans).

• Bought at value: purchase $250,000, appraised $300,000. 100% of cost is $250,000. 75% of value is $225,000. Loan: $225,000, so you bring $25,000 plus closing costs.
• Bought well below value: purchase $200,000, appraised $300,000. 100% of cost is $200,000. 75% of value is $225,000. Loan: $200,000, the full purchase price, with closing costs still due from you.

The lesson is the same as the flip examples: the discount you negotiate on the purchase is what lets the cost cap, rather than the value cap, set your loan.

What the Ratios Leave Out: Interest on Undrawn Rehab Funds

Two loans of the same size can cost different amounts each month. RCN states it charges interest only on the outstanding balance, not the rehab holdback (RCN), and Lima One states investors pay interest only on funds drawn (Lima One). Some lenders charge interest on the full commitment from day one, often called Dutch interest.

Using Example 1 ($330,000 loan, $270,000 funded at closing, $60,000 in draws) and an illustrative 10.00% rate:

• Interest on the $270,000 funded balance: $270,000 x 10% / 12 = $2,250 per month.
• Interest on the full $330,000 commitment: $330,000 x 10% / 12 = $2,750 per month.

That $500 a month gap shrinks as draws are funded, but on a four month renovation it can add up to $2,000. Ask every lender which method it uses.

Cash You Need Beyond the Down Payment

The "cash needed" columns above cover only the gap between cost and loan. Plan for these on top:

• Origination points: one point is 1% of the loan. Easy Street lists 0 to 2 points plus a $1,995 document fee (Easy Street). Two points on the $330,000 loan in Example 1 is $6,600.
• Deferred fees: Lima One offers deferring origination fees until you exit the property (Lima One), which lowers cash at closing but not total cost.
• Third-party costs: title, insurance, appraisal or valuation, and recording. RCN notes it charges no application fee but the borrower pays third-party costs such as appraisals (RCN FAQ). State transfer and mortgage taxes vary, and each of our state guides lists them, for example Florida, Texas, California, Georgia, Ohio, Arizona, and Tennessee.
• Interest reserve and carry: monthly interest-only payments for the full hold, plus taxes, insurance, and utilities.
• Liquidity: many lenders verify reserves beyond the closing cash. Ask for the requirement in writing.

Sizing the Exit: The Rental Refinance

If you plan to keep the property, the takeout lender sizes on the finished value, not your cost. RCN's long-term rental program, for example, allows refinances up to 80% of as-is value and cash-out refinances up to 75% for borrowers with 700+ FICO, falling to 65% and 60% for scores between 660 and 679, with a 1.00 minimum DSCR (RCN loan programs).

Applied to Example 1: a 75% cash-out refinance on a $480,000 appraisal is $360,000, which equals the full $360,000 project cost. At a 660 to 679 score the same refinance is capped at 60%, or $288,000, leaving $72,000 of your money in the deal. Seasoning rules and the appraisal decide the final number, so run the rent and expenses through the DSCR exit calculator before you buy.

Five Ways to Improve Your Sizing

1. Document your track record. Settlement statements for completed flips move you up tiers. RCN counts experience in the last three years and, for its top single-family tier, requires 5+ in-state deals, 10+ total, and a 720+ FICO on loans of $800,000 or less ($1 million in California).
2. Scope the rehab precisely. At RCN, a budget that crosses 50% or 100% of initial value moves the deal into moderate or heavy rehab, which lowers both caps.
3. Support the ARV. Give the valuator recent renovated comparable sales within the same neighborhood. A $20,000 higher ARV adds $15,000 of room under a 75% cap.
4. Negotiate the purchase. On cost-capped deals every dollar off the price lowers the cash you need nearly dollar for dollar.
5. Match the lender to the binding cap. If ARV binds, the LTC headline is irrelevant. If the purchase advance binds, a 95% LTC lender can save you real cash.

Run Your Own Numbers

1. Find the binding cap: enter purchase price, rehab budget, and ARV in the Fix-and-Flip LTC & 70% ARV Cap Calculator. It shows which limit sets your loan and how much cash you bring.
2. Price the full cost of the loan: points, fees, and monthly interest change the real cost on a short hold. The All-In Bridge Loan Cost & Effective APR Calculator turns those into an effective APR by payoff month.
3. Test the rental refinance: if the exit is a DSCR loan, check the post-rehab rent against the takeout lender's coverage test in the Commercial Bridge-to-DSCR Exit Calculator.
4. Owner-occupants: buying a new home before selling the current one uses different sizing (combined LTV on the departing home). Use the Residential Buy-Before-You-Sell Bridge Equity Calculator.
5. Match lenders to your profile: the 5-Step Smart Rate-Match Tool filters lenders by state, credit score, experience, and property type.

Compare lenders head to head in our Kiavi vs Lima One Capital and RCN Capital vs Easy Street Capital comparisons, or see our best fix-and-flip lenders list.

Sources

• Kiavi: Understanding the Math Behind Pricing a Hard Money Loan
• Kiavi: Bridge Loans rates and terms
• RCN Capital: Loan Programs
• RCN Capital: Frequently Asked Questions
• Lima One Capital: Fix and Flip Loans
• Easy Street Capital: EasyFix Fix and Flip Loans
• CoreVest Finance: Bridge Loans
• CoreVest Finance: Fix and Flip Loans

Lender terms were read from the pages above in October 2026 and can change without notice. Figures are published maximums or starting points, not quotes. See our editorial and licensing disclosure.