The Combined Loan to Value (CLTV) is calculated by dividing the loan amount plus any additional subordinate financing into the lower of the sales price or appraised value. Therefore, loans containing subordinate financing have two Loan to Value factors (LTV and CLTV) used in determining loan approval. It should be noted, that loans with subordinate financing are considered to have an additional "layer of risk" and will be scrutinized more carefully by the lender.
