Glossary

A

Absorption Rate: The rate at which available homes are sold in a specific market during a given time period. It is calculated by dividing the number of homes sold in the allotted time period by the total number of available homes
Accessory Dwelling Units (ADUs): A habitable living unit added to, created within, or detached from a primary one-unit Single Family dwelling, which together constitute a single interest in real estate. It is a separate additional living unit, including kitchen, sleeping, and bathroom facilities.
Accrued Interest: The interest that has been incurred on a loan or other financial obligation but has not yet been paid out.
Adaptive Reuse: Repurposing buildings for new uses and modern functions other than those originally intended in order to address present-day needs.
Adjustment Interval: The period of time between changes in your interest rate and/or monthly payment with an adjustable rate loan. These intervals will vary depending on the lending institution and the type of loan your are applying for.
Adjustable Rate Mortgage (ARM): A loan where the rate of interest is tied to a specific financial index, with both the rate of interest and the monthly payments subject to change at established adjustment intervals. (See also Index, Initial Rate, Interest Rate Cap). (Example, a 5 year ARM has a fixed rate for the first five years of the loan and is then adjusted once every year through the term of the loan to reflect the current economic conditions.)
Alliquot Lots: Parcels of land managed by the Bureau of Land Management (BLM), typically standardized into five-acre sections known as aliquots. BLM divides land using a large grid map, and if a piece of land does not neatly fit into a five-acre aliquot, BLM may need to conduct a survey to establish appropriate boundaries. These surveys can cause significant delays in the approval process for development projects.
Amortization: This means by which a home loan is scheduled to be paid off, including principal and interest, by a series of regular installment payments. Loans are typically amortized over the term of the loan.
Anchor Institutions: Anchor institutions are schools, institutions of higher education (IHEs), hospitals, faith-based organizations, and community-based organizations that have deep roots in the community and are longstanding contributors to the community’s stability and strength. Often these institutions are the largest employers, purchasers, and landowners in the community and as a result are the largest contributors to the community’s economy and well-being.
Annual Percentage Rate (APR): The cost of your credit expressed as a yearly rate. It takes into account interest, points and loan origination fee. Since all lenders are required to use the same guidelines in determining APR, this is a good basis for comparing the cost of various loan programs.
Application Fee: A loan application fee, often non-refundable, charged by the lender to cover costs of processing your application.
Appraisal: A formal, written estimate of the current value of a home.
Assumability: A feature of the loan which permits you to transfer your mortgage and its specified terms to the person(s) purchasing your home. Having an assumable loan could make it easier for you to sell your home, since assumption of a loan usually involves lower fees and/or qualifying standards for the new borrower than a new loan. Assumability on fixed or adjustable rate loans varies from lender to lender and loan type.
Audit: An independent examination of an entity's financial statements to ensure compliance with applicable laws and regulations

B

Below-market: A price or a rate that is below the current market price or rate.
Bid Package: A set of documents that contain the scope of work, specifications, drawings, and general conditions for a project or job. Prospective contractors should be able to review the bid package and develop their cost estimates and schedules for the work.
Bi-weekly Mortgage: Typically, a fixed rate mortgage on which payments are due and payable every two weeks. Since a total of 26 bi-weekly payments (equivalent to 13 monthly payments) are made annually, loans of this type are paid off more quickly than loans requiring 12 monthly payments per year.
Bridge Loan: A primary loan that “bridges” the financing for a project to another future permanent type of financing. Helps to acquire property quickly, provides temporary financing awaiting more favorable lending terms, or temporarily funds the acquisition portion of a project while gap financing pays for rehabilitation.
Building setbacks: The distance measured from the property line to any structure, which is unobstructed by structures from the ground upward, but which may include surface driveway areas or other similar surface improvements.

C

Casualty Loss: A loss from theft, fire, storm, or other similar and unexpected occurrences.
Capital Subsidies: Any funds provided from a source (generally a unit of local, State, or Federal government) that reduce the amount of financing a borrower needs to obtain from a conventional lender.
Clear Title: A title that is free of liens or legal questions as to ownership of property.
Climate Resilience: Includes the capability to anticipate, prepare for, respond to, and recover from significant multi-hazard threats without major disruption to social well-being, economy, and environment.
Closing Costs: One-time costs that must be paid before the loan can be “closed” or funded by the lender. These costs may include such things as property taxes, insurance, broker’s fees, escrow fees, title insurance premium, deed recording fees, title transfer tax, etc. Escrow instructions will stipulate which portion of the fees are to be paid by buyer or seller. A Loan Estimate (LE) of closing costs will be given to you by the lender within a few days after receiving your loan application. (All or a portion of your closing costs may be financed. Ask your lender.)
Closing Disclosure (also known as the Settlement Statement): Up to four page financial disclosure statement detailing the closing costs of a home purchase for the buyer and seller.
Co-Housing: A community of private homes centered around a shared space that may include a large kitchen or dining area, laundry, or recreational spaces. Each private home includes traditional amenities such as a private kitchen.
Community Development Financial Institution: (CDFIs) are private sector financial institutions that focus primarily on personal lending and business development efforts in poorer local communities requiring revitalization.
Contingency Costs: An amount included in a budget to account for unforeseen costs or situations not otherwise included in the estimate of project costs. It is typically limited to a certain percentage of the overall budget.
Conventional Financing: Home loans made through a lender using VA, FHA, Rural (Development) Guaranteed, Fannie Mae or Freddie MacDeed of Trust - The document securing a loan purchase.

D

Depreciation: A deductible expense for wear and tear of tangible property that has a useful life of more than one year & is used for business or income-producing purposes.
Davis-Bacon and Related Acts:The Davis-Bacon and Related Acts apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.
Debt Service Coverage Ratio (DSCR or DCR):A metric that looks at a property’s income compared to its debt obligations. Properties with a DSCR of more than 1 are considered profitable, while those with a DSCR of less than one are losing money. DCR/DSCR is an essential part of the decision-making process when a commercial or multifamily lender decides whether to issue a loan. In general, if a property has an abnormally low DCR/DSCR, they will have difficulty paying back their loan on time. This is why the majority of lenders like borrowers to have DSCRs of at least 1.15- 1.25x.
Deed restriction: A limitation on how a property can be used that is tied to the deed, which is a legal document that defines who owns a particular property.
Density: The ratio of a particular type of land use per given area of land. Density measures the intensity of a given land use and is subject to zoning regulations.
Design Concept: A design concept is the broad idea for the design of your affordable housing project. It should be completed by an architect in conjunction with the project team.
Developer Fees: The developer fee is compensation to the project developer for the time and resources spent to develop the project. This is basically the incentive for developers (often times for-profit developers) to develop affordable housing.
Development financing: The efforts of local communities to support, encourage and catalyze expansion through public and private investment in physical development, redevelopment and/or business and industry. It is the act of contributing to a project or deal that causes that project or deal to materialize in a manner that benefits the long-term health of the community.
Discount Points and Fees: A point is a charge equal to one percent of the principal amount of the loan. Points are payable at the close of escrow and may be paid by the buyer or seller, or split between them (e.g. two points charged on a $100,000 loan would equal $2,000). In addition, a flat dollar amount fee may also be charged. Under some lending programs, a buyer may be allowed to include these points and fees as part of the total amount financed. Points are not allowed with the MRB7 program.
Down Payment Assistance (DPA): Second mortgage funds given to the borrower at closing to help with downpayment and closing costs. Also, could be in the form of a grant (non-repayed)
Due Diligence: The general practice of ensuring a sound investment. Funding sources will have different due diligence standards that all projects must comply with in order to receive funding.

E

Economies of Scale: The cost advantage that arises due to scale of operation with the cost/unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.
Energy Performance Contracts:An innovative financing technique that uses the cost-savings from reduced energy consumption to repay the cost of installing energy conservation measures.
Escrow Account: An account for accumulating that portion of a borrower’s monthly payments designated for future payment of taxes, insurance fees, assessments, etc. Required by certain lenders or with certain types of financing. Can also be used in conjunction with buydown loans (contact your lender).
Equity: The difference between fair market value and current indebtedness, usually referred to as the owner’s interest.
Equitable Development: A comprehensive process of planning and investments that tackles deeply entrenched community issues of poverty, economic barriers, environmental quality, and health.
Exclusionary Zoning:The use of zoning ordinances to exclude certain types of land uses from a given community, especially used to regulate racial and economic diversity.
Extremely Low-Income (ELI): Families that fall below 30 percent of the Area Media Income (AMI).

F

Federal Housing Administration (FHA): A government agency which insures repayment of a loan to the lender, with the result that the borrower is able to obtain a home loan with a 3.5% down payment and often at a lower rate of interest.
Fiscal year: A one-year period of time that a company or government uses for accounting purposes and preparation of its financial statements.
Fixed Rate Loan: A loan where the rate of interest is fixed over the life of the loan. Payments on a fully-amortized, fixed rate will not change.
Floor Area Ratio: The relationship between the total amount of usable floor area that a building has, or has been permitted to have, and the total area of the lot on which the building stands.
Foreclosure:The action of taking possession of a mortgaged property when the mortgagor fails to keep up with their mortgage payments.

G

Gap Financing: An interim loan given to finance the difference between the borrower’s primary loan and available cash on hand.
Gentrification: The process of neighborhood change that includes economic change in a historically disinvested neighborhood by means of real estate investment and new higher income residents moving in, as well as demographic change, not only in terms of income level but also in terms of changes in the education level or racial make-up of residents.
Government Sponsored Enterprise (GSE): The housing GSEs are the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank System (FHLBank System), which currently consists of 12 Federal Home Loan Banks (FHLBanks).
Green Building: A building that, in its design, construction, or operation, reduces or eliminates negative impacts, and can create positive impacts on our climate and natural environment. Green buildings preserve precious natural resources and improve our quality of life.
Gross Income: Gross income refers to the total earnings a person receives before paying for taxes and other deductions.

H

Hard Costs: Costs that are directly related to the construction project—land acquisition, materials and/or labor for construction, landscaping, utilities, or infrastructure.
Hard debt:Debt for which there is a requirement for repayment and other credit term. Hard debt has a required monthly payment that must be made whether cash is available or not. Often has a first mortgage (first lien) position.
Housing First:A homeless assistance approach that prioritizes providing permanent housing to people experiencing homelessness, thus ending their homelessness and serving as a platform from which they can pursue personal goals and improve their quality of life. This approach is guided by the belief that people need basic necessities like food and a place to live before attending to anything less critical, such as getting a job, budgeting properly, or attending to substance use issues.
Housing Subsidy: A housing subsidy pays the difference between tenant rent and total rental costs. LIHTC is an indirect federal subsidy used to finance the construction and rehabilitation of low-income affordable rental housing.

I

Impact Fees: Payments required by the local governments of new development for the purpose of providing new or expanded public capital facilities required to serve that development.
Infrastructure:The basic physical and organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise.
In-lieu fees: When a developer is required to build units on-site but is allowed to pay a fee as an alternative, the fee is called an “in-lieu fee.” Note that in-lieu fees are sometimes confused with linkage or impact fees; however, they are different. When a program is structured to require fees instead of requiring on-site units, the fee is called an “impact fee” or a “linkage fee.”
Integrative Design: The practice of integrative design requires gathering information, prioritizing residents’ experiences, setting objectives for building performance and resident health and comfort, and securing buy-in from all stakeholders. These strategies establish collective priorities from the beginning and ensure they are clearly communicated throughout the design and construction of the development.
Interest rates: The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
Investor Equity: Financing provided by owner/investors or the amount of ownership that an investor has in a particular property.
Investors: Individuals or legal entities who seek to convert surplus cash flow into real estate investments that generate income and returns.
Index: Used by lenders to calculate the interest adjustments on adjustable rate loans (ARM). Some indexes are more volatile than others; this can affect adjustments in your interest rate and, subsequently, your monthly payment. Because these indexes reflect the general movement of interest rates, they tend to keep the rate on your adjustable rate loan in line with market conditions.
Initial Rate: An interest rate changes for the first six (6) or twelve (12) months of an adjustable rate loan. Normally, this rate will be lower than prevailing fixed market rates.
Interest Rate Cap: A safeguard into an adjustable rate loan to protect the consumer against dramatic increases in the rate of interest and, consequently, in the monthly payment. For example, an adjustable rate loan may have a two percentage point limit per year on the amount of increase or decrease, as well as a five percentage point limit (increase or decrease) over the life of the loan.

L

Land Entitlement: The legal process by which a developer or landowner gains all necessary approvals for a real estate development plan. This can include both land use approvals and financial incentive approvals.
Land Use Controls: Government ordinances, codes, and permit requirements that restrict the private use of land and natural resources to conform to public policies.
Late Charges: Typically five percent (5%) of principal and interest paid after the 15th day of the month.
Lease-Up: The time period for a newly available property to attract tenants and reach stabilized occupancy. This task usually falls to the property manager.
Leasing: The process of leasing or renting out available units.
Leverage: Leverage is a term with many meanings. In the housing context, it often refers to increasing the potential return of an investment through the use of borrowed or contributed capital, usually from private sources.
Linkage fees: Such fees link the production of market rate real estate to the production of affordable housing. Residential linkage fees can either be a set price for each new home or can be calculated based on the square footage of the new home. Commercial linkage fees (sometimes called “jobs/ housing linkage fees”) are charged to the developers of new office or retail properties and used to fund the development of affordable workforce housing.
Liquid Assets: Funds that can be converted to liquid cash in less than 10 days (i.e., checking/savings accounts) by occupants within the household.
Loan to Value Ratio: (LTV or LTVR), A loan-to-value or LTV ratio is a metric that compares the size of a loan to the value of the asset. Higher LTVs are generally riskier for lenders, and, for certain loans, can result in higher interest rates.
Low-Income: Families that fall below 80 percent of the Area Median Income (AMI).
Loan Estimate: Lenders are required to give you an estimate of closing costs, loan amount, monthly payments, etc.

M

Margin (Spread): An amount expressed as a percentage which is added to an index to determine the interest rate on an adjustable rate loan( e.g. index rate + 2.5% margin). Different lenders and loan programs may use different margins and indexes. With an adjustable rate loan, this margin (spread) generally does not change once it is established in your documents.
Metropolitan Statistical Area: (MSA), A metropolitan statistical area (MSA), formerly known as a standard metropolitan statistical area (SMSA), is the formal definition of a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U.S. Office of Management and Budget (OMB).
Mixed-Use Buildings: Mixed-use development is an example of flexible zoning which allows various types of land uses, including office, commercial, residential, and in some cases, light industrial or manufacturing, to be combined within a single development or district. A major purpose of mixed-use zoning is to allow a balanced mix of office, commercial, and residential uses in close proximity to increase convenience to residents and reduce the number of shopping and/or commuting trips needed. Mixed-use developments can range in size from single buildings with apartments located over retail uses, to large-scale projects that include office and commercial space along with hotels, convention centers, theaters, and housing.
Mortgage Credit Certificate (MCC): The MCC is a forty percent (40%) housing tax credit on your tax liability. This is a dollar for dollar reduction of your federal tax liability, calculated by multiplying the percentage (40%) times the mortgage interest you paid for the year. The remaining sixty percent (60%) of your mortgage interest will continue to qualify as an itemized tax deduction.
Mortgage Insurance Premium (MIP): FHA required mortgage insurance to protect the lender in the case of buyer default.
Mortgage Revenue Bond 7 (MRB7): The MRB7 is a 30-year fixed rate loan. The MRB7 can be on FHA insured, VA, Rural Development, FannieMae and Freddie Mac loans depending on lender. The MRB7 provides a $7,000 interest 0% deferred 10-year second mortgage to assist the borrower with closing costs and downpayment assistance.
Multifamily housing:A structure with five or more dwelling units.

N

National Environmental Protection Act (NEPA): The National Environmental Protection Act's (NEPAs) basic policy is to assure that all branches of government give proper consideration to the environment prior to undertaking any major federal action that significantly affects the environment. All federally funded housing projects must undergo an Environmental review as a part of NEPA.
National Historic Preservation Act (NHPA): The National Historic Preservation Act (NHPA), 16 U.S.C. 470 et seq., directs each federal agency, and those tribal, state, and local governments that assume federal agency responsibilities, to protect historic properties and to avoid, minimize, or mitigate possible harm that may result from agency actions.
Negative Amortization: A situation which may occur on adjustable rate loans which have the “payment cap” feature. (See “Payment Cap”) Because your monthly payment is capped, your adjusted payment amount may, at times, be insufficient to pay the actual amount of interest due. The unpaid (deferred) interest would then be added to your balance. This increase in your loan balance is known as “negative amortization”. A borrower usually has the option of increasing the monthly payment in any given month to avoid negative amortization or making a lump sum payment to pay off any accrued negative amortization.
Net Operating Income (NOI): Simply put, your Net Operating Income (NOI) is calculated by taking a property's gross income and subtracting operating expenses.
New Market Tax Credits (NMTC): Tax credits against Federal income taxes that individual and corporate investors receive in exchange for making investments in Community Development Entities, which are specialized community development financing entities.
Non-Target: Census tracts that are not economically distressed areas determined by the State.

O

Operating Subsidies: Payments to owners of affordable housing developments that make the housing more affordable by covering a portion of the ongoing costs of operating the development (aka operating expenses), such as maintenance, taxes, or interest on debt.

P

Patents: BLM refers to their land deeds as patents. This will be the legal document you try to attain in the transfer or sale of ownership.
Payment Cap: The limited amount by which the payment on an adjustable rate loan can increase or decrease at each payment adjustment interval (typically one year). A Payment Cap ensures that payment changes occur at a gradual pace. If your adjusted payment isn’t sufficient to cover the amount of interest due on the loan, due to the Payment Cap, the unpaid (deferred) interest is added to your loan balance. This is known as “negative amortization”. Since most adjustable rate loans have a maximum amount of allowable negative amortization, once this maximum has been reached, the payment will have to be adjusted beyond the Payment Cap to ensure that the loan will be paid off in the allotted number of years. Provisions for these special adjustments will be in the loan documents.
Performance-Based Contracts: A group or range of financial and non-financial consequences related to the ability of a contractor to meet measurable and achievable performance requirements.
PITI: Refers to “Principal-Interest-Taxes-Insurance.” The total of your monthly home loan payment.
Pre-development: The phase of a capital project between the origination of the concept and the initiation of design. It is the period of gathering information, exploring options, and making decisions about the direction of a project.
Preference: Preferences are used to add points to each applicant’s score as they apply for Low-Income Housing Tax Credits and help states prioritize projects that meet critical housing needs.
Prepaids: Costs associated with the financing of a mortgage loan that one may be required prior to closing &/or funds to be placed in an escrow account to cover Insurance and Property/County/School taxes.
Prepayment Penalty: An additional fee which may be charged by the lender if the loan is paid off prior to the end of the loan term. Generally associated with fixed rate loans. No penalty applies to MHC’s products.
Private-Sector:The private sector is the segment of a national economy that is owned, controlled, and managed by private individuals or enterprises. Meaning non-governmental agencies.
Processing (turnaround) Time: The amount of time required from the day you submit your loan application documents in full to the day the loan closes and loan funds are disbursed. This is the total processing time for your home loan.
Project-Based Rental Assistance (PBRA): A type of HUD housing assistance where HUD directly contracts with private landlords to provide affordable housing to low-income tenants at certain properties.
Property Assessed Clean Energy (PACE):Financing is a way to borrow money for clean energy projects. Property owners repay the borrowed funds along with their property taxes and the assessment remains with the property—not with the original borrower—if it has not been paid off by the time a property is sold.
Property Dispossession: The transfer, gift, or sale of property from one individual to another.
PMI (Private Mortgage Insurance): Insurance coverage for the lender of a certain portion of the loan balance in the event of default and foreclosure. PMI may be required on FannieMae and Freddie Mac conventional loans and will be included as part of your monthly payment.

Q

Qualified Action Plans (QAPs): The federal ex Housing Tax Credit program requires each state agency that allocates tax credits, generally called a housing finance agency, to have a Qualified Allocation Plan (QAP). The QAP sets out the state’s eligibility priorities and criteria for awarding federal tax credits to housing properties. In some states, the QAP also sets out threshold criteria for noncompetitive 4% tax credits and any state low income housing tax credits. T he QAP is a tool advocates can use to influence how their state’s share of annual low income housing tax credits is allocated to affordable housing properties. Advocates can use the public hearing and comment requirements to convince their housing finance agency to better target tax credits to properties that house people with extremely low incomes, locate projects in priority areas, and preserve the existing stock of affordable housing.
Quasi-Governmental Organization: A government organization that is assigned some or many of the attributes normally associated with the private sector.

R

Rate Guarantee: A guaranteed rate lock, at the lender’s option, that the rate in effect on the date you submit your application, or at the time of final approval, will be the final rate on your loan when funded. This guarantee usually expires after a specified period of time.
Real Property: Physical property that is permanent and nonmovable (ie: land and buildings).
Recovery Housing:Recovery housing is characterized by alcohol-and-drug-free living settings that involve peer support and other addiction recovery aids.
Redevelopment:The replacement, rehabilitation, or repurposing of existing improvements on an already developed site.
Redlining:The discriminatory practice of denying services (typically financial) to residents of certain areas based on their race or ethnicity.
Refinance: Negotiation of a new loan in order to pay off an existing loan. Homes are usually refinanced in order to (a) take advantage of lower interest rates, (b) switch from one loan type to another (e.g. from adjustable to fixed), or (c) to generate cash from built-up equity. Since refinancing generally involves new loan costs, these costs must be weighed against benefits to be gained.
Rehabilitation: The labor, materials, tools and other costs of improving buildings, other than minor or routine repairs. Includes when the use of a building is changed to an emergency shelter and the cost of this change and any rehabilitation costs does not exceed 75 percent of the value of the building before the change in use.
Repayment ability: Ability to repay mortgage debt and other monthly obligations. Lenders will assess repayment ability during the lending process.
Return on Investment (ROI): A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
Risk-sharing: The profits and losses for each member of a group of investors are shared and allocated within the group based on a predetermined formula.
Rural Development (RD): Insurance coverage for the lender of a certain portion of the loan balance in the event of default and foreclosure called a “Guaranteed Fee” and it’s only for RD loans, not Fannie Mae/Freddie Mac, VA or FHA.

S

Scoring Criteria: A set of points-based criteria used by states to evaluate projects applying for Low-Income Housing Tax Credits. The applications with the most points receive housing tax credits.
Set aside: Low-Income Housing Tax Credit funds that are set-aside every year from a state’s allocation of housing tax credits and dedicated to specific types of projects.
Single-Family: Single-family residence means a noncommercial dwelling that is occupied exclusively by one family.
Soft costs: Costs that are not associated directly with construction. Can include architectural design, feasibility or assessment studies, legal costs, permits, fees, surveys, appraisals, project management costs, taxes, marketing or communication expenses, certification costs, closing costs, maintenance fees, or security during construction.
Soft debt: Debt for which there is no requirement for repayment, which is deferred or forgiven, debt repayable to a “Related party” such as a loan from a Sponsor to an ownership entity in which the Sponsor has an “Ownership interest,” or debt that is to be repaid only from excess cash flow or upon certain other conditions and is not included in the calculation of “Hard debt.” If there is a mortgage or a deed of trust, typically it is in the second lien position or lower.
Special Assessment:A charge imposed on real property to help pay for a local improvement that benefits the property.
Stakeholder: Defined as an individual or group that has an interest in any decision or activity of an organization. For the purposes of developing affordable housing you will have both community stakeholders and financial stakeholders who have an interest in your project.
Subdivision: The act of dividing land into pieces that are easier to sell or otherwise develop, usually via a plat.
Supportive Services: Services that are designed to provide comprehensive, personalized supports and resources so that individuals and families are able to address the complex issues and challenges that often accompany social or financial vulnerability and may interfere with obtaining long-term housing stability.
Surplus Property: Any publicly owned property with utility or monetary value, including capital assets, sensitive items, commodities, equipment, materials, supplies, buildings, and other property, which is obsolete, unused, not needed for a public purpose, or ineffective for current use.
Syndication: Process that involves multiple banks and financial institutions who pool their capital together to finance a single loan for one borrower. Also can refer to the process of securing tax credits from a pool of investors or selling tax credits to a pool of investors to generate capital for a project.
Syndicators: Tax-credit syndicators help bridge the gap between the various parties to affordable housing transactions. Syndicators raise money from investors and identify low-income housing projects in which to invest that capital.

T

Target: Census tracts that are declared by the State as economically distressed areas.
Tap fees:The charges assessed to install a new water or sewer connection to a municipal or privately owned source.
Tax exempt bonds: The interest component of bond debt service payments is exempt from Federal and sometimes State and local income taxes for the bond holder.
Tax liens: A legal claim against the assets of a person or business who fails to pay taxes owed.
Tenant Income Verification:In order to receive a rental housing subsidy, LIHTC or other, all tenants must certify they meet the eligible income requirements. Depending on the source of your funding, the requirements will vary, but typically tenants are expected to recertify their income on a yearly basis.
Tenant-based rental assistance: Subsidies paid directly to renters that they can use to rent any private property that meets program guidelines, typically in the form of a voucher.
Term: The number of years before your loan is scheduled to be paid off. Fifteen (15) year and thirty (30) year terms are most common.
Third-party: Services provided by an outside organization
Title: A legal document evidencing a person’s ownership of a property.
Title Insurance: A required policy, usually purchased by the seller of a home, ensuring that title will be held free of any liens other than that obtained by the buyer.
Traditional financing: The process of obtaining loans from a “brick and mortar” banking institution.
Transit Hub: A rail, light rail, or commuter rail station; ferry terminal; or bus transfer station served by or connecting multiple modes of transportation.
Truth-in-Lending:A federal law that requires lenders to fully disclose, in writing, the final terms and conditions of a mortgage, including the Annual Percentage Rate (APR) and other charges.

U

Underwriting: Standards used by a lender to determine whether a borrower qualifies for a loan. Underwriting criteria is established by the lender and by agencies such as FHA, VA, Rural Development, FannieMae, and FreddieMac depending on the loan product.
Utility Allowance: The definition of maximum “affordable” rents for tenants includes both housing and reasonable utility costs. Where some or all utilities are tenant-paid, the rent actually charged to the tenant (the “net rent”) must be reduced by the utility allowance. For most programs, utility allowances approximate the reasonable consumption of utilities by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment. Owners of properties financed with LIHTCs must include an allowance for tenant-paid utilities when calculating net tenant rents. Unlike most rental assistance programs, tenants are not limited to paying 30% of actual income for rent and utilities.
Utility Rebates: Cash refunds or rebates for the purchase and installation of energy-efficient equipment or participation in energy reduction programs.

V

Vacant turnover:Turnover occurs when a resident chooses to move out instead of renew their lease. Vacant turnover is the maintenance, cleaning tasks, and process of finding a new tenant that occurs when a unit is vacant. Typically housing projects try to maximize vacant turnover time in order to minimize income lost.
VA Funding Fee: Insurance coverage covering the lender of a certain portion of the loan balance in the event of default or foreclosure. May be required on VA loans depending on the LTV.
Very Low-Income: Families that fall below 50 percent of the Area Median Income (AMI)
Vesting: Name(s) in which title to property is held.
Veterans Administration (VA): A government agency providing guarantees for a lender on approved loans to qualifying veterans.

W

Warranty Deed: The legal document conveying title to a property.