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Glossary
Search the key terms you'll come across in property management and affordable housing.
A
- Absorption Rate
- absorption rate is the speed at which available units or spaces lease up in a market.
- Accessible Unit
- an accessible unit is built or modified so a person with a disability can use it.
- Addendum
- an addendum is an extra document added to a lease or contract.
- Adjusted Income
- adjusted income is household income after approved deductions are removed.
- Administrative Fee
- an administrative fee covers office or processing work.
- Affordability Period
- an affordability period is the time a property must stay affordable under a program or funding agreement.
- Affordable Housing
- affordable housing is housing where the household usually pays no more than about 30% of its income toward housing costs.
- Agency
- an agency is the government or housing organization that oversees a housing program.
- AMI
- AMI, or Area Median Income, is the figure used to set income limits and rent limits.
- Annual Income
- annual income is the household income expected over the next 12 months, used for eligibility and rent calculations.
- Annual Recertification
- an annual recertification is the yearly review of a household's income and family makeup.
- Applicable Fraction
- the applicable fraction is the percentage of a LIHTC building that counts as low-income space.
- Applicable Percentage
- the applicable percentage is the tax credit rate used to calculate LIHTC credits.
- Application Fee
- an application fee is money paid when applying for housing.
- Appraisal
- an appraisal is a professional estimate of property value.
- Arrears
- arrears are unpaid rent or charges that are past due.
- Asset Management
- asset management is oversight of a property's financial and physical performance.
- Assignable Square Footage
- assignable square footage is commercial space assigned to a tenant for their own use.
- Assignment
- an assignment transfers lease or contract rights to another party.
- Assumed Name
- an assumed name is a business name used by an owner or property company.
- Audit
- an audit is a review of records for accuracy and compliance.
B
- Base Rent
- base rent is the regular rent amount before extra fees or charges.
- Basis
- basis is the property cost amount used in tax credit calculations.
- Bedroom Size
- bedroom size is the number of bedrooms used to classify a unit or a voucher need.
- Below-Market Rent
- below-market rent is rent priced lower than normal market rent.
- Blended Occupancy
- blended occupancy describes a property with a mix of affordable and market-rate units.
- BOMA
- BOMA, the Building Owners and Managers Association, sets the standards often used to measure commercial space.
- Bond Financing
- bond financing is money raised through bonds to fund housing or real estate projects.
- Build-Out
- a build-out is the tenant improvements made to a commercial space before move-in.
- Building Class
- building class is a commercial property quality rating such as Class A, Class B, or Class C.
- Burdened Household
- a burdened household pays too much of its income toward housing.
C
- CAM
- CAM, or Common Area Maintenance, is the charge commercial tenants pay toward shared property costs.
- Cap Rate
- cap rate, short for capitalization rate, compares a property's income against its value.
- Capital Expenditure
- a capital expenditure is major property spending for long-term improvements.
- Cash Flow
- cash flow is the money left after income pays expenses and debt.
- Certificate of Occupancy
- a certificate of occupancy is local approval that a building or unit can be occupied.
- Certification
- a certification is the paperwork proving a household meets program rules.
- Change Order
- a change order is an approved change to construction or repair work.
- Class A Property
- a Class A property is newer or higher-end commercial or multifamily real estate.
- Class B Property
- a Class B property is mid-level, often older but still competitive.
- Class C Property
- a Class C property is older and may need more repairs or updates.
- Compliance
- compliance means following the program, lease, financial, and legal rules that apply to a property.
- Compliance Period
- the compliance period is the first 15 years of a LIHTC property, when tax credit rules must be followed.
- Concession
- a concession is a leasing discount such as one month free.
- Conditional Approval
- a conditional approval still needs missing items or final checks.
- Conventional Housing
- conventional housing is market-rate housing without income-based program restrictions.
- Cost Certification
- a cost certification is a review of project costs, often used in affordable housing finance.
- Credit Check
- a credit check is a review of an applicant's credit history.
- Credit Period
- the credit period is the 10 years over which LIHTC credits are claimed.
- Criminal Screening
- criminal screening is a review of criminal history, as allowed by law and policy.
D
- Debt Service
- debt service is the loan payments on a property.
- Debt Service Coverage Ratio
- the debt service coverage ratio shows whether property income can cover loan payments.
- Deed Restriction
- a deed restriction is a recorded rule limiting how a property can be used.
- Default
- a default is a failure to meet a lease, loan, or program requirement.
- Deferred Maintenance
- deferred maintenance is repair work that was delayed and still needs doing.
- Delinquency
- delinquency is unpaid rent or charges after the due date.
- Deposit
- a deposit is money held to cover damage, unpaid rent, or other allowed charges.
- Depreciation
- depreciation is an accounting method that spreads property cost over time.
- Designated Unit
- a designated unit is set aside for a specific program or household type.
- Development Budget
- a development budget is the total projected cost to build or rehab a property.
- Disability Accommodation
- a disability accommodation is a rule or process change made so a person with a disability can use housing equally.
- Disallowance
- a disallowance is an income or expense item that cannot be counted under program rules.
- Due Diligence
- due diligence is the research done before buying, financing, or approving a property.
E
- EIV
- EIV, or Enterprise Income Verification, is the HUD system used to check tenant income against federal wage and benefit records.
- Elderly Household
- an elderly household meets the age-based rules of a housing program.
- Eligible Basis
- eligible basis is the portion of project costs that may count toward LIHTC credits.
- Eligible Household
- an eligible household meets the rules of a housing program.
- Emergency Transfer
- an emergency transfer is a move allowed for safety reasons under certain housing protections.
- Encumbrance
- an encumbrance is a claim or lien against a property.
- Enterprise Income Verification
- Enterprise Income Verification, or EIV, is the HUD system used to verify tenant income data.
- Eviction
- eviction is the legal process to remove a tenant from a unit.
- Excess Income
- excess income is income above a program limit or property rule.
- Excluded Income
- excluded income is income that does not count under a program's rules.
- Expense Ratio
- the expense ratio compares property expenses against property income.
F
- Fair Housing Act
- the Fair Housing Act is the federal law banning housing discrimination based on protected classes.
- Fair Market Rent
- fair market rent is the HUD rent estimate used in some housing programs.
- Family Self-Sufficiency
- Family Self-Sufficiency is a program that helps assisted households work toward financial goals.
- FAS
- FAS, the Financial Assistance Subsystem, is used in HUD-related reporting.
- Financial Statement
- a financial statement reports property income, expenses, assets, and liabilities.
- Fixed Asset
- a fixed asset is a long-term property item such as a building, equipment, or a major improvement.
- Flat Rent
- flat rent is a public housing rent option that is not based on monthly adjusted income.
- Floor Area Ratio
- floor area ratio compares building size against land size.
- Floor Plan
- a floor plan is the layout of a unit or space.
- Foreclosure
- foreclosure is the legal process where a lender takes a property after loan default.
- Full-Service Lease
- a full-service lease is a commercial lease where rent includes many operating costs.
G
- General Partner
- the general partner is the LIHTC ownership partner that usually manages the project.
- Good Cause
- good cause is a valid legal or lease reason for nonrenewal or termination.
- Gross Income
- gross income is income before deductions.
- Gross Potential Rent
- gross potential rent is the total rent possible if every unit leased at full rent.
- Gross Rent
- gross rent is contract rent plus the utility allowance in affordable housing calculations.
- Gross-Up
- a gross-up is a commercial lease adjustment that estimates expenses as if a property were more occupied.
- Guarantor
- a guarantor is a person or company that agrees to pay if the tenant does not.
H
- HAP
- HAP, or Housing Assistance Payment, is the subsidy a housing agency pays an owner toward a household's rent.
- HAP Contract
- a HAP contract governs how housing assistance payments are made for a property.
- Hard Costs
- hard costs are the construction costs of a project, such as labor, materials, and building work.
- HOME
- HOME is a federal block grant that funds state and local affordable housing activities.
- HOME Rent Limits
- HOME rent limits are the maximum rents allowed on HOME-assisted units.
- HOTMA
- HOTMA is the 2016 federal law that changes how HUD programs count income and assets.
- Household Composition
- household composition is the list of people living in a unit and how they are related.
- Housing Assistance Payment
- a housing assistance payment is the subsidy paid on behalf of an eligible household.
- Housing Choice Voucher
- a Housing Choice Voucher is the Section 8 voucher that helps a household rent from a private landlord.
- Housing Quality Standards
- Housing Quality Standards are the HUD inspection standards used for certain assisted housing.
- HUD
- HUD is the U.S. Department of Housing and Urban Development.
- HUD-50059
- form HUD-50059 is the tenant certification form used in many HUD multifamily programs.
- HUD-9887
- form HUD-9887 is the consent form that lets an owner verify a tenant's information.
I
- Imputed Income
- imputed income is the income a program assumes an asset produces when the rules require it.
- Income Averaging
- income averaging is the LIHTC set-aside option that averages income limits across designated units.
- Income Certification
- income certification is the process of documenting household income for program eligibility.
- Income Limit
- an income limit is the most a household can earn and still qualify.
- Income Restricted Unit
- an income restricted unit is limited to households under a set income level.
- Initial Certification
- an initial certification is the first income and eligibility review, completed before move-in.
- Inspection
- an inspection is a review of a unit, a property, or its records.
- Interim Recertification
- an interim recertification is an income or household review done between annual reviews.
- Investor Limited Partner
- the investor limited partner is the LIHTC partner that provides equity in exchange for tax credits.
J
- Joint and Several Liability
- joint and several liability means every adult who signs a lease is fully responsible for the whole rent and all lease terms, not just their own share, a standard term in HUD model leases.
- Joint Venture
- a joint venture is two or more parties, such as a developer and an equity partner, that form one entity to own and develop a property.
- Judicial Foreclosure
- judicial foreclosure is a foreclosure carried out through the state court system rather than a nonjudicial process that skips court, and the rules depend on state law.
- Junior Lien
- a junior lien is a mortgage or claim on a property that only gets paid after a senior lien is satisfied, and affordable deals often carry HOME funds or seller debt in this spot.
- Junk Fees
- junk fees are hidden charges added onto rent that were never disclosed up front, a practice regulators are now proposing to limit in rental housing.
- Jurisdiction (PHA)
- a PHA's jurisdiction is the area where a voucher family can lease a unit under its initial housing agency, and the family can also choose to port and lease outside it.
- Just Cause Eviction
- just cause eviction limits an owner to ending a tenancy only for a listed reason such as nonpayment or a lease violation, required in every LIHTC extended use agreement and adopted more broadly in some states.
K
- K-1
- a K-1, formally Schedule K-1, is the IRS form a partnership uses to report each partner's share of income, deductions, and credits, and in a LIHTC deal it is how the investor partner receives the tax credit.
- Key Money
- key money is an up front payment demanded from a prospective tenant beyond legally allowed charges, and it is illegal in residential leasing in states such as New York and California.
- Key Performance Indicator
- a key performance indicator is a tracked number such as occupancy, turn time, or delinquency used to judge how a portfolio or property is performing.
- Kickback
- a kickback is a fee paid or accepted for referring settlement service business on a federally related loan, a practice barred under RESPA.
- Knox Box
- a Knox Box is a locked box mounted on a building that holds keys so the fire department can get in without breaking a door, often required by local fire code.
L
- Lease
- a lease is the legal agreement between an owner and a tenant.
- Lease Abstract
- a lease abstract is a short summary of the key terms in a lease.
- Lease Commencement Date
- the lease commencement date is the day a lease officially starts.
- Lease Expiration Date
- the lease expiration date is the day a lease ends.
- Lease-Up
- lease-up is the process of renting units at a new or newly renovated property.
- Leasing Agent
- a leasing agent is the staff member who helps prospects rent units.
- Letter of Intent
- a letter of intent is an early, nonbinding summary of proposed deal terms.
- Lien
- a lien is a legal claim against a property for an unpaid debt.
- LIHTC
- LIHTC, the Low-Income Housing Tax Credit, is the federal program that funds affordable rental housing.
- Limited Partner
- a limited partner is an ownership partner with limited control and limited liability.
- Loss Factor
- loss factor is the difference between usable and rentable commercial space.
- Low-Income Unit
- a low-income unit qualifies under affordable program rules.
M
- Market Rent
- market rent is what a unit could likely get on the open market.
- Market-Rate Housing
- market-rate housing has rent set by the market rather than by income limits.
- Master Lease
- a master lease controls multiple spaces or units under one agreement.
- Maximum Rent
- maximum rent is the highest rent a program allows.
- Minimum Set-Aside
- the minimum set-aside is the LIHTC rule requiring a minimum share of units to serve income-qualified households.
- Mixed-Income Property
- a mixed-income property holds both affordable and market-rate units.
- Mixed-Use Property
- a mixed-use property has more than one use, such as apartments over retail.
- Move-In Certification
- a move-in certification is the eligibility certification completed when a household moves in.
- Multifamily Housing
- multifamily housing is a property with multiple rental units.
N
- Net Effective Rent
- net effective rent is the rent after concessions are factored in.
- Net Operating Income
- net operating income is what is left after operating expenses but before debt payments.
- NOI
- NOI stands for net operating income, a property's income after operating expenses and before debt.
- Non-Renewal
- a non-renewal is a decision not to extend a lease after it ends.
- Noncompliance
- noncompliance is a failure to follow program, lease, or legal rules.
- Notice to Vacate
- a notice to vacate is written notice that a tenant or landlord is ending occupancy.
O
- Occupancy Rate
- occupancy rate is the percentage of units or space currently occupied.
- Operating Expense
- an operating expense is a regular cost of running a property.
- Operating Expense Reconciliation
- operating expense reconciliation is the commercial lease process that compares estimated expenses against actual ones.
- Owner Certification
- an owner certification is the owner statement confirming compliance or property information.
- Owner Portal
- an owner portal is the area of a software system where owners view reports, payments, and property data.
P
- Payment Standard
- the payment standard is the voucher program amount used to calculate rental assistance.
- PBRA
- PBRA, or Project-Based Rental Assistance, is subsidy tied to a specific property.
- PBV
- a PBV, or Project-Based Voucher, is a voucher tied to a specific unit or property.
- Percentage Rent
- percentage rent is commercial rent based partly on a tenant's sales.
- PHA
- a PHA is a Public Housing Agency.
- Physical Inspection
- a physical inspection is a review of property condition.
- Placed in Service
- placed in service is the date a building or unit is ready for its intended use, which starts the tax credit clock.
- Portability
- portability is the ability to use a housing voucher in another area.
- Preferential Rent
- preferential rent is rent charged below the legal or maximum allowed rent.
- Preleasing
- preleasing is renting units before they are ready for move-in.
- Pro Forma
- a pro forma is a projection of property income, expenses, and value.
- Project-Based Assistance
- project-based assistance is rental help attached to a property rather than moving with the tenant.
- Protected Class
- a protected class is a group protected from housing discrimination.
- Public Housing
- public housing is HUD-assisted housing owned or operated by a public housing agency.
Q
- QAP
- a QAP, or Qualified Allocation Plan, is the state plan used to award LIHTC credits.
- Qualified Allocation Plan
- a Qualified Allocation Plan is the state document explaining how tax credits are awarded.
- Qualified Basis
- qualified basis is LIHTC eligible basis multiplied by the applicable fraction.
- Qualified Census Tract
- a qualified census tract is an area that may qualify a project for an extra LIHTC basis boost.
- Qualified Contract
- a qualified contract is the LIHTC process that may let an owner seek a buyer after a required period.
- Qualified Low-Income Building
- a qualified low-income building meets the requirements of Section 42.
- Qualified Unit
- a qualified unit meets affordable program rules.
R
- RD 515
- RD 515 is the USDA Rural Development loan program that funds rental housing in rural areas.
- Reasonable Accommodation
- a reasonable accommodation is a change to a rule, policy, or procedure made for a person with a disability.
- Reasonable Modification
- a reasonable modification is a physical change to housing made for disability access.
- Recertification
- recertification is the review of a household's income, size, and eligibility.
- Rent Burden
- rent burden is when housing costs take too much of a household's income.
- Rent Roll
- a rent roll lists units, tenants, rents, lease dates, and balances.
- Rent Schedule
- a rent schedule is the official list of rents for a property's units.
- Rentable Square Feet
- rentable square feet is the commercial space used to calculate rent, including a share of common area.
- Rental Assistance
- rental assistance is subsidy that helps a household pay rent.
- Rental Criteria
- rental criteria are the rules used to review applications.
- RentCafe
- RentCafe is Yardi's resident and property marketing platform.
- Replacement Reserve
- a replacement reserve is money set aside for future major repairs.
- Resident Portal
- a resident portal is the online place where residents pay rent, submit requests, and view documents.
- Residual Receipts
- residual receipts are remaining project funds handled under certain HUD rules.
- Restricted Rent
- restricted rent is rent limited by a program agreement.
- Restrictive Covenant
- a restrictive covenant is a recorded agreement limiting property use or rent rules.
- Retention Rate
- retention rate is the percentage of residents who renew.
S
- Section 3
- Section 3 is the HUD rule on economic opportunities for low-income people on certain HUD-funded work.
- Section 42
- Section 42 is the Internal Revenue Code section that creates LIHTC.
- Section 504
- Section 504 is the disability nondiscrimination rule for federally assisted programs.
- Section 8
- Section 8 is the federal rental assistance program that pays part of a household's rent to a private owner.
- Security Deposit
- a security deposit is money held to cover allowed tenant obligations.
- Set-Aside
- a set-aside is the units reserved for a certain income group or program use.
- Soft Costs
- soft costs are the non-construction costs of a project, such as design, legal, financing, and permits.
- Special Claims
- special claims are the HUD process for recovering certain unpaid rent, damages, or vacancy losses.
- Stabilized Property
- a stabilized property has steady occupancy and operations.
- Sublease
- a sublease is a lease from an existing tenant to another tenant.
- Subsidy
- a subsidy is financial help that lowers tenant rent or supports a property.
- Surety Bond
- a surety bond protects against certain losses or obligations.
T
- T12
- a T12 is a trailing twelve-month financial report.
- Tax Credit
- a tax credit is a dollar-for-dollar reduction in tax liability.
- Tax Credit Investor
- a tax credit investor funds LIHTC projects in exchange for tax benefits.
- Tenant Income Certification
- a tenant income certification documents household income and eligibility for affordable housing.
- Tenant Ledger
- a tenant ledger records rent charges, payments, credits, and balances.
- Tenant Paid Rent
- tenant paid rent is the portion of rent the household pays.
- Tenant Selection Plan
- a tenant selection plan is the written rules for accepting, rejecting, and ranking applicants.
- Termination Notice
- a termination notice is written notice ending a tenancy or assistance.
- TPA
- a TPA, or Transfer of Physical Assets, is the HUD process for a change in property ownership.
- TRACS
- TRACS is the HUD system that receives tenant certifications and subsidy vouchers for Multifamily housing.
- Triple Net Lease
- a triple net lease is a commercial lease where the tenant pays rent plus taxes, insurance, and maintenance.
- TTP
- TTP, or Total Tenant Payment, is the amount HUD rules say a household must pay toward rent.
U
- Underwriting
- underwriting is the review of risk, income, expenses, value, and borrower strength.
- Unit Mix
- unit mix is the breakdown of unit types in a property, such as one-bedroom, two-bedroom, or commercial suites.
- Utility Allowance
- a utility allowance is the amount used to account for tenant-paid utilities in affordable housing rent calculations.
- Utility Reimbursement
- a utility reimbursement is paid to a tenant when the utility allowance is higher than their share of rent.
V
- Vacancy Loss
- vacancy loss is income lost from empty units or spaces.
- VAWA
- VAWA, the Violence Against Women Act, provides housing protections for survivors of domestic violence, dating violence, sexual assault, and stalking.
- Verification
- verification is the proof used to confirm income, assets, expenses, identity, or eligibility.
- Voucher
- a voucher is rental assistance tied to an eligible household.
W
- Waiting List
- a waiting list ranks applicants waiting for available housing.
- Work Order
- a work order is a maintenance request or repair task.
- Write-Off
- a write-off is a balance removed from active accounts because collecting it is unlikely.
Y
- Yield Maintenance
- yield maintenance is a loan prepayment fee based on the lender's lost yield.
Z
- Zoning
- zoning is the local rules controlling how land and buildings can be used.