Real estate lending,
term by term.

Advances against invoices you've issued but haven't been paid on yet. Turns receivables on 60-day terms into working capital now.

What the property will be worth once all the rehab work is complete, validated by an appraiser familiar with comps in the local market.

Example: Buy at $300K, rehab $75K, ARV $550K → loan sized against $550K.

What secures the loan, equipment, receivables, or sometimes the business itself (blanket lien). Collateral type drives rate and structure.

Defined in: CFPB Financial Terms Glossary (opens in a new tab)

For business loans, DSCR measures your business cash flow against the loan payment. Each lender sets its own minimum, and it moves with the structure and the sector, so we do not publish one.

Example: $4,200 rent ÷ $3,360 PITIA = 1.25 DSCR.

Defined in: Fannie Mae Multifamily Guide, Glossary (opens in a new tab)

Construction loans release funds in stages as work is completed and inspected. A typical draw schedule has 5–10 stages mapped to milestones.

Example: Foundation → 15%, framing → 20%, MEP rough-in → 15%, etc.

Defined in: CFPB, What is a construction loan? (opens in a new tab)

How the bridge gets paid off. Lenders require a clear exit up front, sale, refinance to permanent, stabilization, or portfolio refi.

The right to extend the term, usually 6 months, for a fee. Useful insurance if your exit slips.

Fixed rate for the first 5, 7, or 10 years, then the rate adjusts on the schedule the note sets. Often prices below a full 30-year fixed and makes sense for hold-and-refi plans.

Defined in: Fannie Mae Multifamily Guide, Hybrid ARM Loans (opens in a new tab)

Some DSCR loans offer 10-year interest-only payments. Lower monthly cost, stronger cash flow, but no principal paydown during the I/O period.

Defined in: CFPB, What is an interest-only loan? (opens in a new tab)

Revolving credit you draw on as needed and repay down. You only pay interest on what you've drawn. Great for working capital and receivables timing.

Ongoing requirements, minimum balance, financial reporting, debt-to-equity caps, baked into the loan agreement.

How long the bridge is in place before you exit. Shorter terms price better, a 12-month bridge usually beats a 24-month one on rate.

Defined in: CFPB Financial Terms Glossary (opens in a new tab)

Percentage of purchase + rehab the lender will finance. If a lender sets it at 90%, you put down 10% of total cost. This program publishes an ARV ceiling rather than an LTC one, and the LTC a lender offers is set deal by deal.

Example: On a $1.5M project, 90% LTC = up to $1.35M financed.

The loan amount as a percentage of the purchase price alone, before any rehab budget. Some lenders price the purchase and the rehab separately — you might see 85% LTP + 100% of rehab.

The loan amount as a percentage of the property's appraised value. On a stabilized property that means the current value; construction and rehab lenders usually quote it against the as-completed value instead, written as LTV of ARV.

Example: If the finished home will appraise at $2M, a 70% LTV-of-ARV cap = up to $1.4M.

Defined in: CFPB, What is a loan-to-value ratio? (opens in a new tab)

A one-time fee at closing expressed as a percentage of the loan, e.g. 2 points on a $400K loan = $8K.

Defined in: DFPI Glossary of Financial Terms (opens in a new tab)

All-in monthly housing cost: principal, interest, taxes, insurance, and HOA. DSCR lenders underwrite against this, not just P&I.

Defined in: Fannie Mae Selling Guide B3-6-03 (opens in a new tab)

Some bridges have minimum interest periods (e.g. 3-month lockout) before you can pay off without a fee. Worth knowing up front.

Defined in: CFPB, What is a prepayment penalty? (opens in a new tab)

Rehab dollars aren't in your account on day one. They sit with the lender and release in draws as you complete work.

Another name for a bridge loan, used most often on residential deals. It describes the same thing: short-term capital secured by the property that carries you from one position to the next.

Example: An investor buying the next property before the current one sells is asking for a swing loan, whether or not they use the word.

Defined in: Regulation X, 12 CFR § 1024.5(b)(3) (opens in a new tab)

Lump-sum financing paid back over a fixed term, 1 to 5 years typical. Good for equipment, expansion, or specific projects.

The one-page summary of a proposed deal: amount, rate, term, fees, and the conditions attached. It is a proposal rather than a commitment, and the conditions are the part worth reading twice.

Example: Six numbers usually decide a bridge term sheet: loan amount, rate, points, term, extension terms, and prepay.

The informal name for the residential transition loan category — the purchase-and-rehab loan, the bridge, and ground-up construction. It is also used descriptively, for a property between states: mid-lease-up, mid-repositioning, or not yet stabilized.

Example: A partially leased building that a bank will not finance until occupancy stabilizes is a transitional deal.