Glossary of commercial 
real estate terms

A projection of future interest rate expectations based on current market data. In mortgage finance, it influences loan pricing, refinancing decisions, and investment in mortgage-backed securities.

The Federal Home Loan Mortgage Corporation, chartered by Congress to support the US housing finance system and help ensure an affordable, reliable supply of mortgage funds across the country.

A suite of lending products from Freddie Mac tailored to affordable housing, seniors housing, and market-rate housing.

Freddie Mac Small Balance Loan is a streamlined lending program designed for smaller apartment properties nationwide offering loans ranging from $1 million to $7.5 million.

A loan repayment schedule in which regular payments fully pay off the principal and interest by the end of the loan term, leaving no remaining balance.

A vehicle for aggregating capital commitments from investors to invest in either equity or loans (debt).

The general partner(s) manages the day-to-day operations of an investment or investment vehicle. Usually referred to as the sponsor in the case of an investment; however, WDIP is the general partner of its funds.

The Government National Mortgage Association is a federal agency that links the U.S. housing market to global capital markets to provide low-cost financing for federal housing programs.

An enterprise created by Congress for financial services. Fannie Mae and Freddie Mac.

Fixed-income securities issued to finance projects with environmental benefits, such as energy-efficient buildings, renewable energy, or sustainable infrastructure. In commercial real estate, green bonds help fund developments or retrofits that meet sustainability standards.

Developing previously undeveloped land, typically in suburban or rural areas. It offers flexibility in site planning but may require significant infrastructure investment.

Loan programs for borrowers who invest in energy and water efficiency for their existing properties. Fannie Mae offers Green Rewards and Green Building Certifications. Freddie Mac offers Multifamily Green Advantage.

The total area of a land parcel, including non-developable areas like roads, easements, and open space. It contrasts with net acreage, which reflects buildable land.

A valuation metric in commercial real estate calculated by dividing a property's purchase price by its gross annual rental income. It provides a quick estimate of a property's value relative to its income potential but does not account for operating expenses.

A long-term lease agreement in which a tenant leases land from a property owner and is typically responsible for developing and maintaining any improvements, such as buildings, during the lease term. The landowner retains ownership of the land.

An asset class of properties in the service sector, such as hotels, motels, resorts, conference centers, and restaurants, designed to cater to needs related to relaxation, pleasure, business meetings, events, and conferences.

A measure of the median household’s ability to afford the median-priced home in a specific region.

HAP contracts provide tenant-based assistance under HUD’s housing choice voucher program.

HUD Section 220 was created to ensure new construction and rehabilitation of mixed-use projects in urban renewal areas. It includes code enforcement stipulations and was created to insure lenders against loss on mortgage default in areas designated for revitalization.

Section 223F was created to insure mortgage loans to purchase or refinance existing multifamily rental housing.

The “D4” refers to Section 221 (d)(4). This program insures loans for multifamily properties consisting of single-room occupancy (SRO) apartments. There are no Federal subsidies involved with this program and it is the multifamily industry’s highest-leverage, lowest-cost, non-recourse, fixed-rate loan.

This type of loan is insured by the federal government and backed by the Federal Housing Administration (FHA) – part of the US Department of Housing and Urban Development (HUD).

Neighborhood-level data, including demographics, housing metrics, safety statistics, and amenities, to assess investment potential.

A valuation method used primarily for income-producing properties, estimating value based on the property’s income potential. The income approach can be made up of the direct capitalization or discounted cash flow methods, or both.

Housing specifically for seniors that does not provide services that support assistance with daily living.