General Terms Flashcards
IO debt service
interest-only debt service: where a borrower only pays the interest on a loan for a specified period, with the principal repayment deferred until later.
DSCR
Debt Service Coverage Ratio:
Measures a firm’s available cash flow to pay its current debt obligations. The DSCR shows investors and lenders whether a company has enough income to pay its debts. The ratio is calculated by dividing NOI by debt service, including principal and interest.
Title Objection Letter
A formal document used by a buyer or their attorney to formally object to specific issues or conditions found in a title commitment, requesting that the title company address or resolve them before closing on a property.
Common Objections: Liens, Unpaid Taxes, Defective Descriptions, Break in the Chain of Title, Building Code Violations, Easements
Liens
Claims against the property for unpaid debts
Defective Descriptions
Inaccuracies in the property’s legal description
Break in the Chain of Title
Gaps or inconsistencies in the historical record of ownership
Easements
Rights of way or access across the property
Title Commitment
A title commitment is a document issued by a title company that outlines the current state of the title to a property, including any potential issues or encumbrances
Pro Forma
a financial projection that estimates a property’s potential income, expenses, and profitability over a specific period, used to evaluate investment viability and make informed decisions
RCS
Rent Comparability Study
LIHTC
Low-Income Housing Tax Credit:
A federal program that incentivizes the development and preservation of affordable rental housing by offering tax credits to investors who contribute to such projects.
PBVs
Project-based vouchers:
Part of the Section 8 Housing Choice Voucher program, are rental assistance tied to a specific building or property, rather than a tenant, ensuring affordability for residents in those units.
HERS rating reports
Home Energy Rating System:
A numerical score between 0 and 250, indicates a home’s energy efficiency, with lower scores signifying greater efficiency, and is used for compliance with energy codes and to demonstrate a home’s energy performance.
CSL
Construction Supervisor License
TRACS
Tenant Rental Assistance Certification System:
A HUD computer system developed to improve program management and financial control over the Office of Multifamily Housing Programs’ (MFH) rental assistance programs by updating manual procedures to include automated processes and controls.
HIC
Home Improvement Contractor
Required for contractors performing work on existing, 1-4 unit, owner-occupied residential properties
USDA
United States Department of Agriculture
RD
Rural Development
NHFA
New Hampshire Housing Finance Authority
Tax Syndicate
A group of investors who pool their resources to acquire, manage, and profit from real estate investments, often structured as partnerships or LLCs, to potentially leverage tax benefits like depreciation and pass-through deductions
OGC
Office of the General Council:
OGC attorneys provide legal advice and representation to their respective institutions (Harvard, MIT) on all aspects of real estate, including property transactions, construction projects, and regulatory compliance.
FASS
Financial Assessment Subsystem:
A system used by the U.S. Department of Housing and Urban Development (HUD) to collect, validate, and assess the financial data of properties with HUD subsidies, grants, and/or FHA-insured mortgages, ensuring compliance and performance
Soft Debt
Hard Debt
