A
|
B
|
C
|
D
|
E
|
F
|
G
|
H
|
I
|
J
|
K
|
L
|
M
|
N
|
O
|
P
|
Q
R
|
S
|
T
|
U
|
V
|
W
|
X
|
Y
|
Z
----------------------------A-------------------------------
Acreage
- a
2
dimensional
measure
of land
equaling
160
square
rods, 10
square
chains,
4,840
square
yards,
or
43,560
square
feet
Adjustable
rate
mortgage
(arm)
- a
mortgage
with an
interest
rate
that
changes
periodically,
according
to an
index
that is
selected
when the
mortgage
is
issued.
The
initial
rate is
lower
than
that of
fixed-rate
mortgages,
but
monthly
payments
can go
up or
down as
the rate
is
adjusted
Adjustment
interval-
the
period
of time
between
changes
in the
interest
rate for
an
adjustable-rate
mortgage.
Typical
adjustment
intervals
are 6
months
and one
year
Amenities
- in
appraisal,
the
non-monetary
benefits
derived
from
property
ownership
Amortization
period
- the
period
or
length
of time
over
which
the
principal
portion
of a
mortgage
loan is
scheduled
to be
paid
down
through
periodic
payments
Anchored-
refers
to a
piece of
commercial
real
estate
property,
which
will
serve as
the main
tenant
in a
shopping
center
Anchors
- a long
term,
credit
worthy
tenant.
The
presence
of one
or more
“anchors”
enhances
the
value
and the
ability
to
obtain
financing
for a
shopping
center
Annual
percentage
rate (apr)
-
is an
interest
reflecting
the cost
of a
mortgage
as a
yearly
rate.
This
rate is
likely
to be
higher
than the
stated
note
rate or
advertised
rate on
the
mortgage,
because
it takes
into
account
point
and
other
credit
cost.
The apr
allows
home
buyers
to
compare
different
types of
mortgages
based on
the
annual
cost for
each
loan
Appraisal-
an
estimate
of the
value of
a
property,
made by
a
qualified
professional
called
an
appraiser
Assisted
living-
type of
senior
housing
that is
typified
by
independent
living
and
limited
assistance
to its
renters
Assumability
- a
mortgage
loan
which
can be
transferred
to
another
person
without
a change
in the
terms of
the loan
Available
sf-
the
square
feet
available
for
lease
Average
annual
occupancy-
percentage
of
currently
rented
units in
a
building,
city,
neighborhood,
or
complex
Average
daily
rate-
a hotel
rate
used to
evaluate
the
average
daily
rate of
a hotel
inclusive
of
vacancy
and
seasonality
Top of
Page
---------------------------B------------------------------
Balloon
mortgage-
one
large
payment
for the
remaining
balance
of a
mortgage,
due at a
time
specified
in the
contract
Basis
point (bp
) -
1/100 th
of 1%
expressed
as a
margin
over an
index
rate
Bankruptcy
- a
provision
of
federal
law
whereby
a debtor
surrenders
his
assets
to the
bankruptcy
court
and is
relieved
of the
future
obligation
to repay
his
unsecured
debts.
secured
creditors,
those
holding
deeds of
trust or
judgment
liens,
continue
to be
secured
by the
property
but they
may not
take
other
action
to
collect
from the
debtor.
There
are
different
types of
bankruptcy
chapters,
the
above is
very
general
Beneficiary
- a
person
named to
receive
a
benefit
from a
trust. A
contingent
beneficiary
has
conditions
attached
to his
rights;
usually
someone
else
must die
first
Borrowing
entity
type-
the
legal
form
under
which
property
is owned
Bridge/short
term
loan-
a
short-term
or
interim
loan for
borrowers
who need
time to
find
permanent
financing
or are
repositioning
a
commercial
property
Broker
- an
individual
in the
business
of
assisting
in
arranging
funding
or
negotiating
contracts
for a
client
but who
does not
loan the
money
himself
Building
permit-
a
document,
issued
by
government
regulatory
authority
that
allows a
builder
to
construct
or
modify a
structure
Building
sf-
the
usable
square
footage
of the
building
Buy-down-
when the
lender
and/or
the home
builder
subsidized
the
mortgage
by
lowering
the
interest
rate
during
the
first
few
years of
the
loan.
While
the
payments
are
initially
low,
they
will
increase
when the
subsidy
expires
Top
of Page
-----------------------------C------------------------------
Cap
-
the
maximum,
which an
adjustable-rate
mortgage
may
increase,
per year
and/or
the life
of the
loan
regardless
of index
changes.
Caps
(payment
) -
consumer
safeguards
which
limit
the
amount
of
monthly
payments
on an
adjustable
rate
mortgage
the
lender
may
change
Capital
expenditures-
line
items on
a profit
and loss
statement
that
would
not be
expensed
on an
annual
basis.
This
category
would
include
replacement
of major
building
systems,
such as
roofs,
etc…
Capitalization
rate-
the
ratio of
the
first
year noi
to the
asking
price (noi/asking
price).not
the rate
of
return
Carve
out-
the
definition
used for
the
inclusion
of
recourse
in loan
documents
for
fraud
and
misrepresentation
Cash-out
refinancing-
when the
principal
amount
of a new
mortgage
involved
in
refinancing
is
greater
than the
principal
amount
outstanding
of the
existing
mortgage
being
refinanced,
and all
or a
portion
of the
equity
is being
converted
to cash
Caveat
emptor-
buyer
beware.
The
buyer
must
inspect
the
property
and
satisfy
himself
it is
adequate
for his
needs.
The
seller
is under
no
obligation
to
disclose
defects
but may
not
actively
conceal
a known
defect
or lie
if asked
Central
business
district
(cbd
) - the
downtown
section
of a
city,
generally
consisting
of
retail,
office,
hotel,
entertainment,
and
government
land
uses
with
some
high-density
housing
Certificate
of
eligibility-
the
document
given to
qualified
veterans
which
entitles
them to
va
guaranteed
loans
for
homes,
business,
and
mobile
homes.
Certificate
of
eligibility
may be
obtained
by
sending
dd-214(separation
paper)
to the
local VA
office
with va
form
1880
(request
for
certificate
of
eligibility)
Certificate
of
reasonable
value (crv
) - an
appraisal
issued
by the
veterans
administration
showing
the
property’s
current
market
value
Certificate
of title-
a
written
opinion
by an
attorney
or title
company
setting
forth
the
status
of title
to the
property
as shown
on the
public
records.
The
certificate
does not
certify
as to
matters
not of
record
and
affords
no
protection
unless
the
author
was
negligent
Clearance-
the
distance
between
the
buildings
floor
and the
effective
storage
ceiling
Climate
controlled-
an
industrial
and
self-storage
term
that
represents
temperature
controlled
commercial
space
Closing
-
the
meeting
between
the
buyer,
seller
and
lender
(or
their
agents)
where
the
property
and
funds
legally
change
hands
Closing
costs
- the
costs
and fees
associated
with the
official
change
in
ownership
of the
property
and with
obtaining
the
mortgage,
which is
associated
at the
closing
Cmbs
(commercial
mortgage
backed
security
) - a
bond or
other
financial
obligation
secured
by a
pool of
mortgage
loans
Cofi
(cost of
funds
index)
-
index
used to
determine
interest
rate
changes
for
adjustable
rate
mortgages.
It is
based on
the cost
of funds
of the
11 th
district
of the
federal
home
loan
bank
Collateral-
property
pledged
to
secure a
loan
Commercial
land-
development
and
transitional
land
acquired
for
investment
use:
land for
lots,
site
selection,
and
assemblage
of
parcels
Commitment
- a
contract
issued
by a
lender
to make
a loan
on
specific
terms or
conditions
to a
borrower
or
builder
Comparative
market
analysis-
an
estimate
of the
value of
a
property
based on
an
analysis
of sales
of
properties
with
similar
characteristics
Condominium
- a
system
of
individual
fee
simple
ownership
of
portions
(units)
in a
multi-unit
structure,
combined
with
joint
ownership
of
common
areas.
Each
individual
may sell
or
encumber
his own
unit
Conduit
- the
financial
intermediary
that
sponsors
the
conduit
between
the
lender(s)
originating
loans
and the
ultimate
investor.
The
conduit
makes or
purchases
loan
from the
third
party
correspondents
under
standardized
terms,
underwriting
and
documents
and
then,
when
sufficient
volume
has been
obtained,
pools
the
loans
for sale
to
investors
in the
cmbs
market
Congregate
care-
a type
of
senior
housing
that
typified
by a
central
eating
facility,
smaller
rooms,
and a
higher
level of
care for
its
tenants
Constant
maturity
treasure
(cmt)
- an
index
based on
the U.S.
treasury
that is
used in
the
pricing
of debt
for
banks
Construction
loan-
a short
term
loan to
pay for
the
construction
of
commercial
buildings.
These
loans
typically
provide
periodic
disbursements
to the
builder
as each
stage of
the
building
is
completed.
When
construction
is
completed
a
take-out
or
permanent
loan is
used to
pay off
the
construction
loan
Construction
type-
the type
of
construction
used for
a
commercial
building
(i.e.
concrete
tilt-up,
etc…)
Contingency
- an
element
of an
agreement
that
must be
satisfied
before
the
total
agreement
can be
consummated
Coupon-
the
coupon
on U.S.
government
securities
expressed
as an
annual
percentage
of face
value,
is the
interest
rate the
U.S.
government
promises
to pay
to the
holder
on an
ongoing
basis
until
maturity
Covenant
- a
written
agreement
or
restriction
on the
use of
land or
promising
certain
acts.
Homeowner
associations
often
enforce
restrictive
covenants
governing
architectural
controls
and
maintenance
responsibilities.
However,
land
could be
subject
to
restrictive
covenants
even if
there is
no
homeowners
association
Conventional
loan-
a
mortgage
not
insured
by the
FHA or
guaranteed
by the
VA or
deferred
interest:
when a
mortgage
is
written
with a
monthly
payment
that is
less
than
required
to
satisfy
the note
rate,
the
unpaid
interest
is
deferred
by
adding
it to
the loan
balance
Credit
report-
a report
documenting
the
credit
history
and
current
status
of a
borrower’s
credit
standing
Credit
tenant-
a
tenant,
who has
obtained
a debt
rating
by S & P
or
Moody’s
of
“BBB”-
or
better
Credit
tenant
net
lease-
a lease
with a
tenant
that has
a credit
rating
of BBB-
or
better
Top of
Page
----------------------------D------------------------------
Debt
service-
the
periodic
payments
(principal
and
interest)
made on
a loan
Debt
service
coverage
ratio
(or debt
coverage
ratio)
-
measure
a
mortgaged
property’s
ability
to cover
monthly
payments
defined
as the
ratio of
net
operating
income
over the
periodic
payments
(principal
and
interest)
made on
a loan.
A DSCR
of less
than 1.0
means
that
there is
insufficient
cash
flow
generated
by the
property
to cover
required
debt
payments
Debt-to-income-
ratio-the
ratio,
as
expressed
as a
percentage,
which
results
when a
borrower’s
monthly
payment
obligation
on
long-term
debts is
divided
by his
or her
net
effective
income(FHA/VA
loans)
or gross
monthly
income
(conventional
loans)
Deed-
the
written
document
conveying
real
property.
Once
recorded
at the
courthouse,
the
original
piece of
paper is
not
needed
to
convey
title in
the
future
Deed
of trust-
a
voluntary
lien to
secure a
debt
deeding
the
property
to
trustees
who
foreclose,
sell the
property
at
public
auction,
in the
event of
default
on the
note the
deed of
trust
secures.
In many
states,
this
document
is used
in place
of a
mortgage
to
secure
the
payment
of a
note
Default-
failure
to meet
legal
obligations
in a
contract,
specifically,
failure
to make
the
monthly
payments
on a
mortgage
Defeasance
clause-
a clause
in a
mortgage
that
gives
the
borrower
the
right TP
prepay a
commercial
mortgage
by
purchasing
u.s.
treasuries
in an
escrow
account
to pay
off
ongoing
debt
service
Delinquency-
failure
to make
payments
on time,
this can
lead to
foreclosure
Density-
the
number
of
buildings
or
persons
occupying
a
certain
area of
land,
generally
an acre
Delivery-
the
final,
unconditional
and
absolute
transfer
of a
deed to
the
grantee
so that
the
grantor
may not
revoke
it. A
deed,
signed
but held
by the
grantor,
does not
pass
title
Department
of
veterans
affairs-
an
independent
agency
of the
federal
government
which
guarantees
long-term,
low-or-no-down
payment
mortgages
to
eligible
veterans
Depreciation
(accounting)
-
allocating
the cost
of an
asset
over its
estimated
useful
life
Depreciation
(appraisal)
- a
charge
against
the
reproduction
cost
(new) of
an asset
for the
estimated
wear and
obsolescence.
Depreciation
may be
physical,
functional,
or
environmental
Discount
rate-
the rate
of
interest
that the
Federal
Reserve
charges
member
banks
for
loans
Distribution
warehouse-
(also
called
light
industrial)
-
generally
the
least
intense
industrial
use.
Office
use is
limited
to
management
tasks
for the
distribution
or
warehouse
facility,
or about
15
percent
of total
space
Dock
high-
existence
and/or
number
of dock
level
doors
Double
–wide-
a mobile
home
consisting
of two
units
which
have
been
fastened
together
along
their
length
Down
payment-
money
paid to
make up
the
difference
between
the
purchase
price
and the
mortgage
amount.
Down
payments
usually
are 10
to 20
percent
of the
sales
price on
conventional
Due
diligence-
the
legal
definition:
a
measure
of
prudence,
activity
or
assiduity,
as is
property
to be
expected
from,
and
ordinarily
exercised
by, a
reasonable
and
prudent
person
under
the
particular
circumstances.
In CMBS
due
diligence
is the
foundation
of the
process
because
of the
reliance
securities
investors
must
place on
the
specific
expertise
of the
professionals
involved
in the
transaction
Due-on-sale
clause-
a
provision
in a
mortgage
or deed
of trust
that
allows
the
lender
to
demand
immediate
payment
of the
balance
of the
mortgage
if the
mortgage
holder
sells
the home
Top of
Page
---------------------------E-----------------------------
Easement-
the
right to
use the
land of
another
for a
specific
limited
purpose
Effective
gross
income-
gross
income
of a
building
if fully
rented,
less an
allowance
for
estimated
vacancies
Eminent
domain-
the
power of
the
state to
take
private
property
for
public
use upon
payment
of just
compensation
Encroachment-
the
physical
intrusion
of a
structure
or
improvement
on the
land of
another.
Examples
include
a fence
or
driveway
over the
property
line
Engineering
report-
report
generated
by an
architect
or
engineer
describing
the
current
physical
condition
of the
property
and its
major
building
systems,
i.e.-
HVAC,
parking
lot,
roof,
etc…the
report
also
determines
an
amount
for
calculating
replacement
reserves,
if
needed
Entitlement-
the VA
home
loan
benefit
is
called
entitlement.
Entitlement
for a VA
guaranteed
home
loan.
This is
also
known as
eligibility
Environmental
report-
report
generated
by
qualified
environmental
firms to
determine
potential
environmental
hazards
in a
building’s
region
or
within
the
building
itself
Environmental
risk-
risk of
loss of
collateral
value
and of
lender
liability
due to
the
presence
of
hazardous
materials,
such as
asbestos,
PCB’s
radon or
leaking
underground
storage
tanks
(lusts)
on a
property
Equal
credit
opportunity(ecoa)-
is a
federal
law that
requires
lenders
and
other
creditors
to make
credit
equally
available
without
discrimination
based on
race,
color,
religion,
national
origin,
age,
sex,
marital
status
or
receipt
of
income
from
public
assistance
programs
Equity-
the
difference
between
the fair
market
value
and
current
indebtedness,
also
referred
to as
“owners
interest”
Equity
loan-
a loan
for an
equity
position
which
represents
an
ownership
position
in a
property
or a
loan for
the
participation
in the
profits
of the
commercial
property
Equity
sharing-
a form
of joint
ownership
between
an
owner/occupant
and an
owner/investor.
The
investor
takes
depreciation
deductions
for his
share of
the
ownership.
The
occupant
receives
a
portion
of the
tax
write-offs
for
interest
and
taxes
and a
part of
his
monthly
payment
is
treated
as rent.
The
co-owners
divide
the
profit
upon
sale of
the
property
Ernest
money-
money
given by
a buyer
to a
seller
as part
of the
purchase
price to
bind a
transaction
or
assure
payment
Escrow-
1. A
special
account
set up
by the
lender
in which
money is
held to
pay for
the
taxes
and
insurance
2. A
third
party
who
carries
out the
instructions
of both
the
buyer
and
seller
to
handle
the
paperwork
at the
settlement
Eurodollar-
U.S.
dollar
denominated
deposits
at
commercial
banks
outside
of the
United
States
Extended
stay-
a hotel
that
caters
to a
business
traveler
on an
extended
lodging
period
Top of
Page
-----------------------------F--------------------------------
Fair
market
value-
an
appraisal
term for
the
price
which a
property
would
bring in
an
competitive
market,
given a
willing
seller
and
willing
buyer,
each
having a
reasonable
knowledge
of all
pertinent
facts,
with
neither
being
under
any
compulsion
to buy
or sell
Farm-
land
dues for
agricultural
purposes
for crop
and
livestock
farming
Farmers
home
administration
(FMHA)
-
provides
financing
to
farmers
and
other
qualified
borrowers
who are
unable
to
obtain
loans
elsewhere
Federal
funds
(fed
funds)
- fed
funds
are the
interest
rate
charged
by those
banks
with
excess
reserves
on hand
(reserves
over and
above
the
minimum
required
by the
Federal
Reserve)
to those
banks in
need of
overnight
loans to
meet
reserve
requirements.
Since it
is set
daily,
the
federal
funds
rate is
the most
sensitive
indicator
of the
direction
of
interest
rates
Federal
home
loan
mortgage
corporation
(FHLMC)
-
provides
a
secondary
market
for
saving
and
loans by
purchasing
their
conventional
loans.
Also
known as
“Freddie
Mac”
Federal
housing
administration
(FHA)
- a
division
of the
department
of
housing
and
urban
development.
Its main
activity
is the
insuring
of
residential
mortgage
loans
made by
private
lenders.
FHA also
sets
standards
for
underwriting
mortgages
Federal
national
mortgage
association
(FNMA)
-
secondary
mortgage
institution
which is
the
largest
single
holder
of home
mortgages
in the
United
States.
FNMA
buys VA,
FHA, and
conventional
mortgages
from
primary
lenders.
Also
known as
“Fannie
Mae”
FHA
loan-
a loan
insured
by the
federal
housing
administration
open to
all
qualified
home
purchasers.
While
there
are
limits
to the
size of
FHA
loans
FHA
mortgage
insurance-
requires
a small
fee (up
to 3.8
percent
of the
loan
amount)
paid at
closing
or a
portion
of the
fee
added to
each
monthly
payment
of an
FHA loan
to
insure
the loan
with
FHA. On
a 9.5
percent
$75,000.00
30-year
fixed
rate FHA
loan,
this fee
would
amount
to
either
$2,850
at
closing
or an
extra
$31 a
month
for the
life of
the
loan. In
addition,
FHA
mortgage
insurance
requires
an
annual
fee of
0.5
percent
of the
current
loan
amount,
paid in
monthly
installments.
The
lower
the down
payment,
the more
years
the fee
must be
paid
Firm
commitment-
a
promise
by FHA
to
insure a
mortgage
loan for
a
specified
property
and
borrower.
A
promise
from a
lender
to make
a
mortgage
loan
Fit-out-
tenant
improvements
within a
commercial
property
Fixed-rate
mortgage-
a
mortgage
with an
interest
rate
that
remains
constant
for the
life of
the loan
Fixtures-
personal
property
for
which
some
reason,
such as
the
manner
of
attachment,
has
become
realty.
Such
property
is also
referred
to as
chattel
real
Flex
space-
an
industrial
property,
which
has both
an
office
and
industrial
component
Floor-to-area-
ratio
(FAR) -
the
relationship
between
the
total
amount
of floor
space in
a
multi-story
building
and the
base of
that
building.
FAR’s
are
dictated
by
zoning
leas, in
effect,
stipulate
the
maximum
number
of
stories
a
building
may have
Foreclosure-
the
process
by which
a lender
takes
back a
property
on which
the
mortgagee
has
defaulted.
A
servicer
may take
over a
property
from a
borrower
on
behalf
of a
lender.
A
property
usually
goes
into the
process
of
foreclosure
if
payments
are more
than 90
days
past due
Foundation-
the
concrete
slab
beneath
the
property,
which
holds
the
property
in place
Franchise-
a
business
arrangement
undertaken
for the
purpose
of
marketing
a
product
or
service.
One
party
(the
franchiser)
provides
marketing
and
selling
expertise
for a
fee t
another
party
(the
franchisee)
who in
turn
sells
the
product
or
service
in the
marketplace
Franchise
fees-
the fee
is
usually
an
initial
purchase
requirement
plus an
ongoing
percentage
of gross
sales of
the
business
Freestanding
retail-
a
building
which
contains
only one
retail
business.
Fast-food
franchises
and
retail
stores
are
often
freestanding
buildings
Freestanding-
one
commercial
building
meant to
be
occupied
by one
single
user
Full
service-
a hotel
definition
that
represents
services
provided
to its
guests
outside
of
lodging
(i.e.-room
service,
concierge
services,
and
restaurants)
Top of
Page
---------------------------G----------------------------
General
business-
includes
all of
business
assets
and
equipment,
may
include
property
or land
General
partnership-
in a
partnership,
a
partner
whose
liability
is not
limited.
All
partners
in an
ordinary
partnership
are
general
partners.
A
limited
partnership
must
have at
least
one
general
partner
Good
faith
deposit-
a
deposit
made by
a
purchaser
of real
estate
to
evidence
and
honesty
Government
national
mortgage
association
(GNMA)
-
provides
sources
of funds
for
residential
mortgages,
insured
or
guaranteed
by FHA
or VA.
Also
known as
“Ginnie
Mae”
Government
subsidized-
rents
that are
partly
paid by
the
government
(e.g.
section
8
residential
subsidies)
Grade
level
door-
a door
at the
ground
level at
the
foundation
Ground
level-
existence
and/or
number
of
ground
level
doors
Graduated
payment
mortgage
(GPM)
- a type
of
flexible
payment
mortgage
where
the
payments
increase
for a
specified
period
of time
and then
level
off.
This
type of
mortgage
has
negative
amortization
built
into it.
Guaranty-
a
promise
by one
party to
pay a
debt or
perform
an
obligation
contracted
by
another
if the
original
party
fells to
pay or
perform
according
to a
contract
Top of
Page
----------------------------H-------------------------------
Hazard
insurance-
a form
of
insurance
in which
the
insurance
company
protect
the
insured
specified
losses,
such as
fire,
windstorm,
and the
like
High
rise
office-
a
commonly
used
expression
referring
to an
office
building
that is
high
enough
to
require
an
elevator
Housing
expenses-to-income
ratio-
the
ratio,
expressed
as a
percentage,
which
results
when a
borrower’s
housing
expenses
are
divided
by
his/her
net
effective
income
(FHA/VA
loans)
or gross
monthly
income(conventional
loans)
Top of
Page
---------------------------I--------------------------
Impound-
the
portion
of the
borrower’s
monthly
payments
held by
the
lender
or
service
to pay
taxes,
hazard
insurance,
mortgage
insurance,
lease
payments,
and
other
items as
they
become
due.
Also
known as
“reserves”
Index-
an
economic
indicator,
usually
a
published
interest
rate
Industrial-
property
used for
industrial
purpose,
such as
factories
Industrial
for
lease-
industrial
space
available
Interest-
the sum
paid for
borrowing
money,
which
pays the
lender’s
costs
for
doing
business
Interest
rate-
the sum
charged
for
borrowing
money,
expressed
as a
percentage
Interest
rate
cap-
limits
the
interest
rate or
the
interest
rate
adjustment
to a
specified
maximum.
This
protects
the
borrower
from
increasing
interest
rates
Interim
financing-
a
construction
loan
made
during
completion
of a
building
or a
project.
A
permanent
loan
usually
replaces
this
loan
after
completion
Investor-
a money
source
for a
lender
Top of
Page
--------------------------J----------------------------
Joint
ownership
agreement-
an
agreement
between
owners
defining
their
rights,
ownership,
monetary
obligations
and
responsibilities.
This
could be
between
an
investor
and an
occupant
or the
occupants.
If an
investor
is
involved,
the
investor
does not
take
depreciation
deductions
and none
of the
occupant’s
payment
is
deemed
rent for
tax
purposes
Joint
tenancy-
two or
more
persons
own a
property.
Joint
tenants
with the
common
law
right of
survivorship
means
the
survivor
inherits
the
property
without
reference
to the
decedent’s
will.
Creditors
may sue
to have
the
property
divided
to
settle
claims
against
one of
the
owners
Joint
venture-
an
agreement
by two
or more
individuals
or
entities
to
engage
in a
single
project
or
undertaking.
Joint
ventures
are used
in real
estate
development
as a
means of
raising
capital
and
spreading
risk.
For all
practical
purposes
a joint
venture
is
similar
to a
general
partnership.
However,
once the
purpose
of the
joint
venture
has been
accomplished,
the
entity
ceases
to exist
Top of
Page
-----------------------------K---------------------------
(None)
Top of
Page
--------------------------L-------------------------------
Lease
assignment-an
agreement
between
the
commercial
property
owner
and the
lender
that
assigns
lease
payments
directly
to the
lender
Lease
type-
gross,
triple
net (NNN),
net (NN),
hybrid,
etc…
Leasehold
improvements-
the cost
of
improvements
for a
leased
property,
often
paid by
the
tenant
Leasing
commissions-
an
amount
earned
by a
real
estate
broker
or
leasing
agent
for his
services
Lessee-
tenant
in a
building
Libor (
London
interbank
offered
rate) -
the rate
that the
most
creditworthy
international
banks
dealing
in
Eurodollars
charge
each
other
for
large
loans.
Rates
are
quoted
in
monthly
increments
out to 1
year
Lien-
a claim
or
charge
against
property.
Property
is said
to be
encumbered
by a
lien and
the lien
must be
removed
to clear
title
Limited
liability
Company
(LLC) -
the
restriction
of one’s
potential
losses
to the
amount
invested.
The
absence
of
personal
liability.
Provided
to
stockholders
in a
corporation
and
limited
partners
of a
limited
partnership
Limited
partnership-
one in
which
there is
at least
one
partner
who is
passive
and
limits
liability
to the
amount
invested,
and at
least
one
partner
whose
liability
extends
beyond
monetary
investment
Limited
service-
a hotel
that
offers
lodging
services
only
Loan
processing
fee-
a fee
charged
by a
lender,
to
prepare
all the
documents
associated
with
your
mortgage
Loan-to-value-
ratio
(LTV)
- the
ratio
between
the
principal
amount
of the
mortgage
balance,
at
origination
or
thereafter,
to the
current
value of
the
underlying
real
estate
collateral.
The
ratio is
commonly
expressed
to a
potential
borrower
as the
percentage
of value
a
lending
institution
is
willing
to
finance.
The
ratio is
dynamic,
and
varies
by
lending
institution,
property
type,
geographic
location,
property
size,
etc…
Lock-out
period-
a period
of time
after
loan
origination
during
which a
borrower
cannot
prepay
the
mortgage
loan
Lot
size-
total
square
footage
of the
land
Low-rise
office-
a
commonly
used
expression
referring
to an
office
building
that is
too low
to
require
an
elevator
Top of
Page
------------------------M------------------------
Mall-
(also
called
super
regional
center)
an
enclosed
shopping
center
with
three or
more
major
department
stores
which
draws
from a
large
trade
area 12
or more
miles
Management
fee-
the
agreed-upon
compensation
paid to
a
property
management
company
for
managing
a real
estate
project.
The fee
is
usually
based on
a
percentage
of
effective
gross
income.
Manufacturing-
(also
called
heavy
industrial)
- auto
making,
textiles,
steel,
chemicals,
and food
processing
are
typical
uses of
such
properties.
Typically
zero to
five
percent
office
space
Margin-
the
amount
that is
added to
an index
rate to
determine
the
total
interest
rate
Marketing
expenses-
expenses
accrued
to
market
commercial
properties
Market
value-
the
highest
price
that a
buyer
would
pay and
the
lowest
price
that a
seller
would
accept
on a
property.
Market
value
may be
different
from the
price a
property
could
actually
be sold
for at a
given
time
Mat-
monthly
average
treasury
Maturity-
1. The
termination
period
of a
note
(e.g. -
a 25
year
mortgage
has
maturity
of 25
years)
2. In
sales
law, the
date a
note
becomes
due
Max
contiguous
sf-
the
amount
of
available
connected
square
feet
Max
lease
rate-
the
highest
asking
lease
rate
Medical
office-
an
office
space
which
offers
medical
services
Mezzanine/second
loan-
a loan
secured
by a
mortgage
or trust
deed, in
which
the lien
is
junior,
or
secondary,
to
another
mortgage
or trust
deed
Mid-rise-
a
commonly
used
expression
referring
to an
office
building,
that is
high
enough
to
require
stairs,
but too
low to
require
an
elevator
Military
clause-
a clause
included
in a
lease of
residential
property,
which
allows
the
tenant
to
terminate
the
lease
without
penalty
if and
when the
tenant
is
transferred
to
another
location
Min
lease
rate-
the
lowest
lease
rate
available
Min
divisible
sf-
the
smallest
amount
of
available
square
feet
Mixed
use-
a real
estate
development
that
contains
two or
more
different
uses all
intended
to be
harmonious
and
complimentary.
An
example
would be
a
high-rise
building
with
retail
shops on
the
first to
floors,
office
space on
floors
three
through
ten,
apartments
on the
next ten
floors,
and a
restaurant
on the
Top of
Page
floor
Mobile
home
park-
a parcel
of land
zoned
and
developed
for use
by
occupants
of
mobile
homes
Money
market-
the
market
for
short-term
debt
instruments
Mortgage-
a
voluntary
lien
filed
against
a
property
to
secure a
debt,
usually
a loan.
To
foreclose,
the
lender
must
often
institute
a court
action
and the
borrower
may have
the
right to
reclaim
the
property
after
foreclosure
Mortgage
insurance-
money
paid to
insure
the
mortgage
when the
down
payment
is less
than 20
percent
Mortgage
insurance
premium
(MIP)
- one
half
percent
borrowers
pay each
month on
FHA
insured
mortgage
loans.
It is
insurance
from FHA
to the
lender
against
incurring
a loss
on
account
of the
borrower’s
default.
On
September
1, 1983,
the MIP
was
changed
to a one
time
premium
to the
borrowers
Mortgagee-
the
lender
Mortgagor-
the
borrower
or
homeowner
Multi-family
property
class a-
properties
are
above
average
in terms
of
design,
construction
and
finish:
command
the
highest
rental
rates:
have a
superior
location,
in terms
of
desirability
and/or
accessibility:
generally
are
professionally
managed
by
national
or large
regional
management
companies
Multi-family
property
class b-
properties
frequently
do not
possess
design
and
finish
reflective
of
current
standards
and
preference:
construction
is
adequate:
command
average
rental
rates:
generally
are well
maintained
by
national
or
regional
management
companies:
unit
sizes
are
usually
larger
than
current
standards
Multi-family
property
class c-
properties
provide
functional
housing:
exhibit
some
level of
deferred
maintenance:
command
below
average
rental
rates:
usually
located
in less
desirable
areas:
generally
managed
by
smaller,
local
property
management
companies:
tenants
provide
a less
stable
income
stream
to
property
owners
than
class A
and B
tenants
Top of
Page
---------------------------N---------------------------
Negative
amortization-
occurs
when
your
monthly
payments
are not
large
enough
to pay
all the
interest
due on
the
loan.
This
unpaid
interest
is added
to the
unpaid
balance
of the
loan.
The
danger
of
negative
amortization
is that
the home
buyer
ends up
owing
more
than the
original
amount
of the
loan
Negotiable
rate
mortgage-
loan in
which
the
interest
rate is
adjusted
periodically
Neighborhood
center-
(including
community
center)
- a
shopping
center
anchored
by a
supermarket
and/or
drugstore,
that
provides
convenience
goods
and
services
to a
neighborhood.
It is
usually
between
30,000
and
100,000
square
feet,
and
draws
from a
one to
three
mile
radius
Net
effective
income-
the
borrower’s
gross
income
minus
federal
income
tax
Net
effective
rent-
rental
rate
adjusted
for
lease
concessions
Net-net
lease (NN)
-
usually
requires
the
tenant
to pay
for
property
taxes
and
insurance
in
addition
to the
rent
Net
operating
income (NOI)
- total
income
less
operating
expenses,
adjustments,
etc…but
before
mortgage
payments,
tenant
improvements
and
leasing
commissions
Non
assumption
clause-
a
statement
in a
mortgage
contract
forbidding
the
assumption
of the
mortgage
without
the
prior
approval
of the
lender.
Note:
the
signed
obligation
to pay a
debt, as
a
mortgage
note
Non-recourse-
a
mortgage
or deed
of trust
securing
a note
without
recourse
allows
the
lender
to look
only to
the
security
(property)
for
repayment
in the
event of
default,
and not
personally
to the
borrower.
A loan
not
allowing
for a
deficiency
judgment.
The
lender’s
only
recourse
in the
event of
default
is the
security
(property)
and the
borrower
is not
personally
liable
Note-
a
written
promise
to pay a
certain
sum of
money at
a
certain
time. A
negotiable
note
starts
“pay to
the
order
of” and
is
transferable
by
endorsement
similar
to a
check
Notice
of
default
(nod) -
to
initiate
a
non-judicial
foreclosure
proceeding
involving
a public
sale of
the real
property
securing
the deed
of
trust.
The
trustee
under
the deed
of trust
records
a notice
of
default
and
election
(“nod”)
the real
property
collateral
in the
public
records
Top of
Page
----------------------O--------------------------
Office-
a
structure
used
primarily
for the
carrying
on of
business
100%
private
pay-
assisted
living
designation
where
senior
housing
residents
pay 100%
of the
rent
versus
by
welfare
or
government
subsidies
Operating
expense-
periodic
expenses
necessary
to the
operation
and
maintenance
of an
enterprise
(e.g.-taxes,
salaries,
insurance,
and
maintenance).
Often
used as
a basis
for rent
increases
Origination
fee-
the fee
charged
by a
lender
to
prepare
loan
documents,
perform
credit
checks,
inspect
and
sometimes
appraise
a
property:
usually
computed
as a
percentage
of the
face
value of
the loan
Origination-
securing
a
completed
mortgage
application
from a
commercial
or
residential
borrower
Top of
Page
------------------------P-------------------------------
Percentage
lease-
commonly
used for
large
retail
stores.
Rent
payments
include
a
minimum
or “base
rent”
plus a
percentage
of the
gross
sales
“overage”.
Percentages
generally
vary
from 1%
to 6% of
the
gross
sales
depending
on the
type of
store
and
sales
volume
Permanent
loan-
a long
term
mortgage,
usually
ten
years or
more.
Also
called
an “end
loan”
Phase I-
an
assessment
and
report
prepared
by a
professional
environment
consultant
who
reviews
the
property-both
land and
improvements-to
ascertain
the
presence
or
potential
presence
of
environmental
hazards
At the
property,
such as
underground
water
contamination,
PCB’s,
abandoned
disposal
of
paints
and
other
chemicals,
asbestos
and a
wide
range of
other
potentially
damaging
materials.
This
environmental
site
assessment
(ESA)
provides
a review
and
makes a
recommendation
as to
whether
further
investigation
is
warranted
(a phase
ii
environmental
site
assessment).
This
latter
report
would
confirm
or
disavow
the
presence
of an
environmental
hazard
and,
should
one be
found,
will
recommend
additional
review
and/or
mitigation
efforts
that
should
be
undertaken
Piti-
Principal,
Interest,
Taxes,
Insurance
are also
called
monthly
housing
expense
Pledged
account
mortgage-
money is
placed
in a
pledged
savings
account
and this
fund
plus
interest
is
gradually
used to
reduce
mortgage
payments
Points
(loan
discount
points)
-
each
point is
equal to
1% of
the
total
amount
of a
mortgage
Potential
gross
rent-
gross
income
of a
building
if fully
rented
Power of
attorney-
a
written
document
authorizing
another
to act
on his
behalf
as an
attorney
in fact.
One does
not need
to be a
licensed
attorney
to act
as an
attorney
in fact
but,
power of
attorney
forms
are
powerful
legal
documents
that
should
be used
only
under
advice
of a
licensed
attorney
at law
Pre-leased
%-
to
obtain
lease
commitments
in a
building
or
complex
prior to
its
being
available
for
occupancy
Prepaid
expenses-
necessary
to
create
an
escrow
account
or to
adjust
the
seller’s
existing
escrow
account.
Can
include
taxes,
hazard
insurance,
private
mortgage
insurance
and
special
assessments
Prepayment-
a
privilege
in a
mortgage
permitting
the
borrower
to make
payments
in
advance
of their
due date
Prepayment
penalty-
fees
paid by
borrowers
for the
privilege
of
retiring
a loan
early
Primary
mortgage
market-
lenders
making
mortgage
loans
directly
to
borrower’s
such as
savings
and loan
association,
commercial
banks,
and
mortgage
companies.
These
lenders
sometimes
sell
their
mortgages
into the
secondary
mortgage
market
Prime
rate-
the rate
at which
banks
lend to
their
most
creditworthy
customers
Principal-
1. The
amount
of debt,
not
including
interest,
left on
a loan
2. The
face
amount
of the
mortgage
Private
mortgage
insurance(PMI)-
in the
event
that you
do not
have a
20
percent
down
payment,
lenders
will
allow a
smaller
down
payment
as low
as 5
percent
in some
cases.
With the
smaller
down
payment
loans,
however,
borrowers
are
usually
required
to carry
private
mortgage
insurance.
Private
mortgage
insurance
will
require
an
initial
premium
payment
of 1.0%
to 5.0%
of your
mortgage
amount
and may
require
an
additional
monthly
fee,
depending
on your
loan’s
structure
Pro
forma- (from
Latin
pro
forma
“according
to
form”).
Financial
statements
showing
what is
expected
to occur
Property
administrator-
person
in
broker’s
employ
who is
responsible
for
updating
and
renewing
a
property
listing,
if it is
different
from the
contact
name
Property
grade-
a
stratification
of
property
type
that is
indicative
of the
property’s
ability
to
command
rental
rates
Property
subtype-
a
property
description
that
provides
additional
information
to the
lender
Property
tax-
taxes
based on
the
market
value of
a
property.
Property
taxes
vary
from
state to
state
Top of
Page
--------------------Q----------------------
Quitclaim
deed-
a deed
releasing
whatever
interest
you may
hold in
a
property
but
making
no
warranty
what so
ever
Top of
Page
----------------------R-----------------------
R &
D-
these
facilities
are
generally
used in
high
technology
markets
and are
broadly
defined
to
include
wide
variations
in
markets
across
the
country.
R & D
properties
could
have lab
facilities,
offices,
warehouse
facilities,
or
services
such as
carpentry
or
machine
repair.
Typically,
each
property
allows a
variable
combination
of
office
and
other
uses.
The
percentage
of
office
space
ranges
from 20
to 100
percent,
depending
on the
market
and
individual
needs of
the user
Rail
served-
whether
the
building
is
served
NY
railroad
Ranch-
land
devoted
to
rosining
livestock
under
range
conditions
with
forage
grass as
main
source
of feed
Rate
index-
an index
used to
adjust
the
interest
rate of
an
adjustable
mortgage
loan
(e.g.-the
change
in U.S.
treasury
securities
(T-bills)
with
1-year
maturity.
The
weekly
average
yield on
said
securities,
adjusted
to a
constant
maturity
of 1
year,
which is
the
result
of
weekly
sales,
may be
obtained
weekly
from the
Federal
Reserve
statistical
release
h.15
(519).
This
change
in
interest
rate is
the
“index”
for the
change
in a
specific
adjustable
mortgage
loan)
Real
estate
settlement
procedures
act (RESPA)
- RESPA
is a
federal
law that
allows
consumers
to
review
information
on known
or
estimated
settlement
cost
once
after
application
and once
prior to
or at a
settlement.
The law
requires
lenders
to
furnish
the
information
after
application
only
Realtor-
a real
estate
broker
or an
associate
holding
active
membership
in a
local
real
estate
board
affiliated
with the
national
association
of
realtors
Recession-
the
cancellation
of a
contract-
with
respect
to
mortgage
refinancing,
the law
that
gives
the
homeowner
three
days to
cancel a
contract,
in some
cases
once it
is
signed
if the
transaction
uses
equity
in the
home as
security
Recording
fees-
money
paid to
the
lender
for
recording
a home
sale
with the
local
authorities,
thereby
making
it part
of the
public
records
Recourse-
personal
liability
Recreational
land-
land
devoted
to
commercial
outdoor
sporting
activity
and
relaxation
Refinance-
to
replace
an old
loan(s)
with a
new
loan(s)
Regional
center-
a
shopping
center
with one
or two
department
store
and a
variety
of
smaller
stores.
It is
larger
than
300,000
square
feet and
draws
from an
8 mile
radius
or more
Rent
roll-
a list
of
tenants
leasing
property,
which
detail
terms of
lease,
area
leased,
and the
amount
of rent
being
paid
Rent
step-up-
a lease
agreement
in which
the rent
increases
every
period
for a
fixed
amount
of time
or for
the life
of the
lease
Rentable
square
feet
(same as
net
lease
area)
- in a
building
or
project,
floor
space
that may
be
rented
to
tenants.
The area
upon
which
rental
payments
are
based.
Generally
excludes
common
area and
space
devoted
to the
heating,
cooling,
and
other
equipment
of a
building’
Replacement
reserves-
an
amount
set
aside
from net
operating
income
to pay
for the
eventual
wearing
out of
short-lived
assets.
Monthly
deposits
that a
lender
may
require
a
borrower
to a
reserve
in an
account,
along
with
principal
and
interest
payment
for
future
capital
improvements
of major
building
systems;(i.e.-HVAC,
parking
lot,
carpets,
roof,
etc…)
Reserve
funds-
in CMBS,
portion
of the
bond
proceeds
that are
retained
to cover
losses
on the
mortgage
pool. A
form of
credit
enhancement
(also
referred
to as
“reserve
account”
Retail-
a
property
type
which
sells
goods to
consumers
Reverse
annuity
mortgage-
form of
mortgage
in which
the
lender
makes
periodic
payments
to the
borrower
using
the
borrower’s
equity
in the
home as
satisfaction
of
mortgage:
the
document
issued
by the
mortgagee
when the
mortgage
loan is
paid in
full.
Also
called
“release
of
mortgage”
Reversionary
value
(RV) -
the
value of
property
at the
expiration
of a
certain
time
period.
In
transportation,
recreational
vehicle
Top of
Page
--------------------------S-----------------------------
Sales
broker-
commercial
real
estate
broker
that
represents
client
in the
sale or
purchase
of
commercial
real
estate
property
Second
mortgage-
a
mortgage
that is
second
in
priority
because
of the
time
recording
the
mortgage
or of
the
subordination
of the
mortgage
Secondary
mortgage
market-
the
buying
and
selling
of first
mortgaged
or trust
deeds by
banks,
insurance
companies,
government
agencies,
and
other
mortgagees.
This
enables
lenders
to keep
inadequate
supply
of money
for new
loans
Self-amortizing
mortgage-
one that
will
retire
itself
through
regular
principal
and
interest
payments.
Contrast
with
balloon
mortgage
or
interest-only
loan
Self-storage-
(also
called
mini-storage)
provides
personal
storage
for
lease by
consumers
Senior
housing-
(includes
assisted
living,
congregate
care,
senior
apartments
and
skilled
nursing
centers)
multi-residential
property
specifically
designed
for care
of
senior
citizens
and/or
physically
disabled
persons
Servicing-
all the
steps
and
operations
a lender
performs
to keep
a loan
in good
standing,
such as
collection
of
payments,
payment
of
taxes,
insurance,
property
inspections
and the
like
Shadow
anchored-
an
unanchored
shopping
center
located
near an
anchored
shopping
center
Shared
appreciation
mortgage-
mortgage
in which
a
borrower
receives
a
below-market
interest
rate in
return
for
which
the
lender
(or
another
investor
such as
a family
member
or other
partner)
receives
a
portion
of the
future
appreciation
in the
value of
the
property.
May also
apply to
mortgages
where
the
borrowers
share
the
monthly
principal
and
interest
payments
with
another
party in
exchange
for a
part of
the
appreciation
Simple
interest-
interest
in which
is
computed
only on
the
principal
balance
Single
wide-
a mobile
home
consisting
of one
unit
Site
work-
the
location
or place
of a
plot of
ground
set
aside
for a
particular
type of
land use
Skilled
nursing-
a type
of
senior
housing
which
offers
on-site
medical
care
Sole
proprietorship-
ownership
of a
business,
with no
formal
entity
as a
vehicle
or
structure
Spread-
number
of basis
points
over a
base
rate
index
Sprinkler-
existence
of fire
suppression
systems
in the
building
Stabilized
operating
property-
the
income
generated
on an
annual
basis
from the
commercial
property
is
stable,
consistent
and
reliable
Strip
center-
a string
of
stores
in a
commercial
area,
totaling
30,000
square
feet,
without
central
leasing,
management,
or theme
Structural/engineering
report-
a
property
condition
report
that
outlines
the
current
structural
stability
or
instability
of a
property.
The
report
will
outline
immediate
costs
needed
to
repair
the
property,
as well
as a
maintenance
program
to
maintain
the
property
at its
current
status
Suburban-
describes
a town
or
unincorporated
developed
area in
a close
proximity
to a
city.
Suburbs,
largely
residential,
are
often
dependent
on the
city for
employment
and
support
services;
generally
characterized
by
low-density
development
relative
to the
city
Survey-
a
measurement
of land,
prepared
by a
registered
land
surveyor,
showing
the
location
of the
land
with
reference
to know
points,
its
dimensions,
and the
location
and
dimensions
of any
building
Sweat
equity-
equity
created
by a
purchaser
performing
work on
a
property
being
purchased
Top of
Page
-----------------------------T-----------------------------
Tax
&
insurance
impound-
monthly
deposits
that a
lender
may
require
to be
included
with
principal
and
interest
payments
for the
payment
of taxes
and
insurance
Tenant-
one who
is given
possession
of real
estate
for a
fixed
period
or at
will
Tenants
by the
entirety-
a
husband
and wife
own the
property
with the
common
law
right of
survivorship,
if one
dies,
the
other
automatically
inherits
Tenant
improvements
(TI) -
the
expense
to
physically
improve
the
property
to
attract
new
tenants
to new
or
vacated
space
which
may
include
new
improvements
or
remodeling.
May be
paid by
tenant,
landlord,
or both.
Typically,
tenants
are
provided
with a
market
rate TI
allowance
($/sq.ft.)That
the
owner
will
contribute
towards
improvements.
The
tenant
must pay
for
amounts
above
the TI
allowance
desired
by the
tenant
Tenants
in
common-
two or
more
persons
own the
property
with no
right of
survivorship.
If one
dies,
his
interest
passes
to his
heirs,
not
necessarily
the
co-owner.
Either
party,
or a
creditor
of one,
may sue
to
partition
the
property
Term-
the
length
of a
mortgage
Third
party
costs-
costs
resulting
from
third
party
reports,
whether
it be
appraisal
reports,
environmental
reports
or
structural
engineering
reports
Timberland-
land
used for
production
of
forest
stands
for
commercial
use
Title-
the
actual
legal
document
conferring
ownership
of a
piece of
real
estate
Title
insurance-
an
insurance
policy
that
insures
you
against
errors
in the
title
search-
essentially
guaranteeing
your and
your
lenders,
financial
interest
in the
property
Title
search-
an
examination
of
municipal
records
to
determine
the
legal
ownership
of
property.
Usually
is
performed
by a
title
company
Total
annual
operating
income-
total
yearly
income
less
operating
expenses,
adjustments,
etc…but
before
mortgage
payments,
tenant
improvements
and
leasing
commissions
Total
annual
room
income-
a hotel
definition
that
represent
the
gross
annual
receipts
from
room
revenue
Traffic
count-
the
amount
of
incoming
and
outgoing
traffic
a
retailer
or
self-storage
building
generates
over a
fixed
period
of time
Triple
net
lease (NNN)
- a
lease
that
requires
the
tenant
to pay
for
property
taxes,
insurance
and
maintenance
in
addition
to the
rent
(also
referred
to as
“net
lease”)
Triple
wide-
a mobile
home
consisting
of three
units
which
have
been
fastened
together
along
their
length
Truth in
lending-
federal
law
requiring
disclosure
of the
annual
percentage
rate to
home
buyers
shortly
after
they
apply
for the
loan
Two-step
mortgage-
mortgage
in which
the
borrower
receives
a
below-market
interest
rate for
a
specified
number
of years
(most
often 7
to 10),
and then
receives
a new
interest
rate
adjusted
(within
certain
limits)
to
market
conditions
at the
same
time.
The
lender
sometimes
has the
option
to call
the loan
due with
30 days
notice
at the
end of
seven or
10
years.
(Also
called
“super
seven”
or
“premier”
mortgage)
Top of
Page
-----------------------U--------------------------
Underwriting-
the
decision
whether
to make
a loan
to a
potential
home
buyer
based on
credit,
employment,
assets,
and
other
factors
and the
matching
of the
risk to
an
appropriate
rate and
term or
loan
amount
U.S.
treasury
bill-
treasury
bills,
or
t-bills,
are
short
term
securities
with
maturities
of up to
one
year.
They are
issued
by the
U.S.
government
at a
discount
from
face
value.
The
price is
quoted
in
yield,
not
dollars.
At
maturity,
t-bills
are
redeemed
for full
face
value.
T-bills
are
issued
in 3
month, 6
month,
and 1
year
maturities
and are
backed
by the
full
faith
and
credit
of the
U.S.
government
Unanchored-
a tenant
in a
shopping
center,
which
doesn’t
have an
anchored
tenant
U.S.
treasury
bond-
treasury
bonds
are long
term
securities
with
maturities
greater
than 10
years.
Treasury
bonds
are
coupon
bearing
severities
that pay
interest
on a
semi-annual
basis.
Treasury
bonds
are
backed
by the
full
faith
and
credit
of the
U.S.
government
U.S.
treasury
note-
treasury
notes
are
intermediate
term
securities
issued
with 2,
3, 5,
and 10
year
maturities.
Treasury
notes
are
coupon
bearing
securities
that pay
interest
on a
semi-annual
basis.
Treasury
notes
are
backed
by the
full
faith
and
credit
of the
U.S.
government
Usury-
interest
charged
in
excess
of the
legal
rate
established
by law
Top of
Page
----------------------V---------------------------
Vacancy-
unoccupied
units as
a
percentage
of the
total
number
Vacancy
percent-
the
percent
of all
units or
space
that is
unoccupied
or not
rented.
On a
pro-forma
income
statement
a
projected
vacancy
rate is
used to
estimate
the
vacancy
allowance,
which is
deducted
from
potential
gross
income
to
derive
effective
gross
income
VA
loans-
long
term,
low-or
no down
payment
loan
guaranteed
by the
department
of
veterans
affairs.
Restricted
to
individuals
qualified
by
military
service
or other
entitlements
VA
mortgage
funding
fee-
premium
of up to
1-7/8%
(depending
on the
size of
the down
payment)
paid on
a
VA-backed
loan. On
a
$75,000
fixed-rate
mortgage
with no
down
payment,
this
would
amount
to
$1,406
either
paid at
closing
or added
to the
amount
financed
Verification
of
deposits-
document
signed
by the
borrower’s
financial
institution
verifying
the
status
and
balance
of
his/her
financial
accounts
Verification
of
employment-
document
signed
by the
borrower’s
employer
verifying
his/her
position
and
salary
Top of
Page
-------------------------W----------------------
Warehouse
fee-
many
mortgage
firms
must
borrow
funds on
a short
term
basis in
order to
originate
loans
which
are to
be sold
later in
the
secondary
mortgage
market
(or to
investors).
When the
prime
rate of
interest
is
higher
on
short-term
loans
than on
mortgage
loans,
the
mortgage
firm has
an
economic
loss
which is
offset
by
charging
a
warehouse
fee
Wraparound-
wraparound
results
when an
existing
assumable
loan is
combined
with a
new
loan,
resulting
in an
interest
rate
somewhere
between
the old
rate and
the
current
market
rate.
The
payments
are made
to a
second
lender
or the
previous
homeowner,
who then
forwards
the
payments
to the
first
lender
after
taking
the
additional
amount
off the
Top of
Page.
The debt
secured
includes
an
existing
debt
already
on the
property.
The
payments
made to
the
holder
of the
wraparound
include
payments
due on
the
existing
loan and
the
holder
must
forward
the
appropriate
portion
of each
payment
on the
existing
note
holder
Top of
Page
Free Consultation
