Investment to Value (ITV)

What is Investment to Value?

Investment to Value (ITV) is the ratio of a note investor's purchase price to the property value securing the loan. It is calculated as purchase price ÷ property value, expressed as a percentage. For a non-performing note bought for $40,000 secured by a property worth $100,000, the ITV is 40%.

ITV vs. LTV

ITV and Loan to Value (LTV) are often confused but measure different things. LTV is the borrower's perspective: the unpaid loan balance divided by the property value. ITV is the investor's perspective: the price the investor paid for the note divided by the property value. A loan with 90% LTV (borrower owes 90% of property value) can have a 40% ITV if the investor bought the note at a steep discount to par.

ITV is the more useful metric for pricing decisions on non-performing notes because it directly measures the equity cushion protecting the investor's basis.

Why ITV matters

When a note investor evaluates a non-performing loan, the ITV ratio is the headline pricing metric. A lower ITV means:

• More equity cushion if the property must be foreclosed and sold
• Greater absolute upside on a discounted payoff (DPO) workout
• Less downside if the property value declines during the workout period

Most institutional note investors target ITV bands by lien position and loan status — for example, 35–50% ITV on first-lien non-performing residential loans, lower on second liens.

ITV in pricing tools

The FIXnotes deal calculator and most NPL pricing models accept the bid amount and a BPO (broker price opinion) to compute ITV automatically. When a seller publishes inventory with stated UPB and BPO, sophisticated buyers translate that into ITV at their target bid before submitting an offer.