- ARV (After-Repair Value)
- The estimated value of a property after planned renovations are complete. Some fix-and-flip and construction programs limit the loan to a percentage of ARV.
- Bridge loan
- Short-term financing used to close or hold a property until longer-term financing or a sale is in place.
- BRRRR
- Buy, Rehab, Rent, Refinance, Repeat: an investor strategy that recycles capital from one rental property into the next.
- DSCR (Debt Service Coverage Ratio)
- Qualifying property income divided by the applicable debt payment. A ratio above 1.00 generally means income exceeds the measured debt payment.
- Draw
- A release of renovation or construction funds in stages, usually after work is verified.
- Equipment financing
- Funding used to buy machinery, vehicles, technology, or tools, where the equipment often serves as collateral.
- FICO score
- A widely used credit score. Minimum score requirements vary by lender and program.
- Interest-only
- A payment structure where only interest is paid for a set period, common during construction or rehab.
- LTC (Loan-to-Cost)
- The loan amount as a percentage of the total project cost, including purchase and renovation or construction.
- LTV (Loan-to-Value)
- The loan amount as a percentage of the property's appraised value.
- Line of credit
- Revolving funding you can draw from, repay, and draw again up to an approved limit.
- Portfolio loan
- One loan that covers multiple investment properties.
- Reserves
- Cash or liquid assets a lender may require a borrower to hold after closing.
- SBA loan
- A business loan partially guaranteed by the U.S. Small Business Administration and issued by participating lenders.
- Term loan
- A lump-sum loan repaid in scheduled installments over a set term.
- Underwriting
- The lender's review of the applicant, property, documents, and risk before approval.
- Working capital
- Funds used to cover day-to-day operating needs such as payroll, inventory, and expenses.
Programs, rates, terms, amounts, and timing vary by lender and applicant. All financing is subject to underwriting, approval, and current program availability.