Don't Just Look at the Price.
Look at What You're Creating.

After-improved value (AIV) — sometimes called after-renovation value or ARV — is the appraiser's estimate of what the property will be worth once renovation is complete. Renovation loan programs like FHA 203(k), HomeStyle, and CHOICERenovation base the maximum loan amount on AIV rather than the current as-is value. That's what makes renovation financing fundamentally different from a standard purchase loan: you're borrowing against what you're creating, not just what exists today.

Equity created is the difference between your after-improved value and your total project cost (purchase price + renovation budget). If you buy a property for $185,000, spend $75,000 renovating it, and the finished property appraises at $340,000 — your total cost basis is $260,000 and you've created $80,000 in equity through the renovation. That equity exists because you added real value, not just because you paid more.

Loan-to-after-improved-value (LTV on AIV) divides your loan amount by the after-improved value. Renovation loan programs use this ratio to determine how much they'll lend. FHA 203(k) allows up to 96.5% LTV on AIV (with 3.5% down). HomeStyle and CHOICERenovation allow up to 97% LTV on AIV for primary residences. The lower your LTV on AIV, the more equity cushion you have at completion.

This analyzer is designed for any deal where renovation is part of the value thesis — whether you're using an FHA 203(k), HomeStyle, CHOICERenovation, hard money, or conventional purchase-plus-rehab structure. The core question it answers is the same regardless of financing: how much value are you creating relative to what you're spending? The financing structure determines how you access that value — the calculator helps you see whether the value is there to access.