Capital Stack
This position in the capital stack has the highest repayment priority and the lowest risk.
Senior Debt / First Mortgage
This type of rate is composed of an index plus a spread.
All-in Rate / All-in Coupon
This metric is calculated as Loan divided by Total Value.
LTV (Loan to Value)
This loan type is used for stable, existing properties with terms of 7+ years.
Permanent Loan
This lender type holds loans on their balance sheet, favors fixed rates over Treasuries, and offers early rate lock.
Insurance Company
This type of financing gives an investor a percentage of ownership in exchange for contributing cash.
Equity Financing
A loan that requires no principal payments during the loan term is called this.
Interest Only (IO)
This ratio measures a property's NOI relative to its debt service.
DSCR (Debt Service Coverage Ratio)
This loan type finances new development and typically requires payment guarantees.
Construction Loan
This lender type pools and securitizes loans, uses swaps pricing, and employs a third-party servicer.
CMBS Lender
Sitting between senior debt and preferred equity, this layer has the 2nd highest repayment priority.
Mezzanine Debt
This prepayment penalty compensates the lender for lost interest over the remaining loan term.
Yield Maintenance
Unlike DSCR or LTV, this metric ignores cap rates, interest rates, and amortization - But focuses on NOI
Debt Yield (DY)
A borrower seeking flexibility during a lease-up or redevelopment would pursue this loan type.
Bridge / Transitional Loan
This lender type focuses on bridge and high-yield floating-rate loans at up to 80% leverage.
Debt Fund
This equity split structure involves a General Partner and a Limited Partner.
Joint Venture (JV)
This loan structure uses a lockbox to capture and control cash flow.
Cash Management
This metric divides the loan amount by the total project cost basis.
LTC (Loan to Cost)
This loan type bridges the gap between senior debt and equity in the capital stack.
Mezzanine (Mezz) Loan
This lender type values recourse and is heavily dependent upon relationships.
Banks
This position in the capital stack carries the greatest return potential but the lowest repayment priority.
Common Equity / Sponsor Equity
A borrower personally liable beyond the collateral has this type of recourse.
Full Recourse
This metrics divides the NOI by the total project cost.
Yield on Cost
Fannie Mae and Freddie Mac originate this loan type, limited to multi-housing only.
Agency Loan
This type of execution is often used for a shortfall in common equity
Preferred Equity