Real Estate Acronyms & Abbreviations

What APR, ARV, DSCR, DTI, LTV, NOI, PITI, PMI and other real estate acronyms stand for - with links to full explanations.

Acronym	Stands for	In plain English
AFFO	Adjusted Funds From Operations	AFFO refines FFO further by subtracting recurring capital expenditures and leasing costs needed to maintain the properties — intended to approximate the cash actually available to distribute to shareholders, often shown per share as "AFFO per share."
APR	Annual Percentage Rate	APR is the annualized cost of a mortgage expressed as a percentage, combining the interest rate with certain lender fees and closing costs — making it useful for comparing the total cost of different loan offers.
ARM	Adjustable-Rate Mortgage	An ARM is a mortgage with an interest rate that starts fixed for an initial period, then adjusts periodically based on market rates — potentially rising or falling over the life of the loan.
ARV	After-Repair Value	After-repair value (ARV) is the estimated market value of a property after all planned renovations or repairs have been completed.
AVM	Automated Valuation Model	An AVM is a software-based estimate of a property's value generated from public records, tax data, and recent comparable sales — fast and free, but less precise than a licensed appraisal.
BRRRR	Buy, Rehab, Rent, Refinance, Repeat	BRRRR is an investment strategy where an investor buys a distressed property, renovates it, rents it to tenants, refinances based on the improved post-renovation value, and uses the cash-out equity to fund the next purchase.
CAM	Common Area Maintenance	CAM charges are a tenant's pro-rata share of the cost to maintain a commercial property's shared spaces — parking lots, lobbies, landscaping, and shared utilities — typically billed on top of base rent.
CapEx	Capital Expenditures (reserve)	A CapEx reserve is money set aside from rental income to cover eventual big-ticket replacements — roof, HVAC, water heater — that don't happen every year but are certain to happen eventually.
CD	Closing Disclosure	The Closing Disclosure is a standardized form lenders must provide at least three business days before closing, detailing the final loan terms, projected payments, and closing costs.
CMA	Comparative Market Analysis	A CMA is an agent-prepared report estimating a property's value by comparing it to similar recently sold, active, and pending listings in the area — commonly used to help set a listing price.
CO	Certificate of Occupancy	A certificate of occupancy is a document issued by a local government confirming a newly built or renovated property meets building codes and is legally safe to live in.
CoC	Cash-on-Cash Return	Cash-on-cash return measures the annual pre-tax cash income a property generates relative to the actual cash invested — typically the down payment, closing costs, and any upfront renovation spend.
CTC	Clear to Close	Clear to close is the status a loan reaches once underwriting has verified every condition of approval, meaning the lender is ready to schedule closing and disburse funds.
DOM	Days on Market	Days on market is the number of days a property has been actively listed for sale, from listing date to going under contract — a key indicator of how a property is performing relative to the local market.
DSCR	Debt Service Coverage Ratio	DSCR compares a property's net operating income to its debt payments, showing whether rental income alone covers the mortgage — lenders use it to qualify borrowers for DSCR loans, which don't require personal income verification.
DST	Delaware Statutory Trust	A Delaware Statutory Trust is a legal structure that lets multiple investors each own a fractional, passive interest in a larger property, while still qualifying as "like-kind" real estate for a 1031 exchange.
DTI	Debt-to-Income Ratio	DTI compares a borrower's total monthly debt payments to their gross monthly income, expressed as a percentage — one of the main factors lenders use to decide how much they'll lend.
FAR	Floor Area Ratio	Floor area ratio is a zoning limit expressing how much total building floor space is allowed relative to the size of the lot it sits on.
FFO	Funds From Operations	FFO is a standard REIT profitability metric that adds depreciation and amortization back to net income and removes gains or losses from property sales — designed to better reflect real estate cash flow than GAAP net income, since real estate depreciation rarely matches actual value decline.
FHA	Federal Housing Administration (loan)	An FHA loan is a mortgage insured by the Federal Housing Administration, allowing lower down payments and credit scores than most conventional loans in exchange for mandatory mortgage insurance.
FSBO	For Sale By Owner	FSBO describes a home sale where the seller lists and markets the property directly, without hiring a listing agent — potentially saving on listing-side commission, but taking on the agent's pricing, marketing, and negotiation work themselves.
GLA	Gross Leasable Area	Gross leasable area is the total floor space in a retail or commercial property designed for tenant occupancy and rent generation — the standard denominator for measuring a shopping center's size and rent per square foot.
GP	General Partner	The general partner is the party that sources, acquires, and actively manages a real estate syndication's investment — typically taking on legal liability and earning fees plus a carried-interest profit share for doing so.
GRM	Gross Rent Multiplier	GRM is a quick screening ratio that compares a property's price to its gross annual rental income, before any expenses are subtracted.
HELOC	Home Equity Line of Credit	A HELOC is a revolving line of credit secured by a home's equity — similar to a credit card, letting a homeowner borrow, repay, and re-borrow up to a set limit during a draw period, usually at a variable interest rate.
HOA	Homeowners Association	An HOA is an organization that manages shared amenities and enforces community rules in a neighborhood or condo building, funded by mandatory fees paid by residents.
HOI	Homeowner's Insurance	"HOI" is a common abbreviation for homeowners insurance, frequently used as a line item on mortgage, escrow, and closing documents.
IRR	Internal Rate of Return	IRR is the annualized rate of return an investment is expected to generate over its full holding period, accounting for the timing and size of all cash flows — including the eventual sale.
LE	Loan Estimate	The Loan Estimate is a standardized form lenders must provide within three business days of a mortgage application, outlining estimated interest rate, monthly payment, and closing costs.
LP	Limited Partner	A limited partner is a passive investor in a real estate syndication who contributes capital but isn't involved in day-to-day management, with liability generally limited to the amount they invested.
LTV	Loan-to-Value Ratio	LTV compares a loan amount to the value of the property securing it, expressed as a percentage — a key number lenders use to gauge risk.
MAO	Maximum Allowable Offer	MAO is the highest price an investor should pay for a fix-and-flip property to hit their target profit, calculated from the after-repair value, renovation costs, and desired margin.
MIP	Mortgage Insurance Premium	MIP is the mortgage insurance required on FHA loans, charged as both an upfront fee and an ongoing monthly premium, in most cases regardless of down payment size.
MLS	Multiple Listing Service	The MLS is a database where real estate agents share listings of homes for sale, giving buyers and their agents access to comprehensive, up-to-date property data within a market.
NNN	Triple Net Lease	A triple net lease (NNN) requires the tenant to pay property taxes, insurance, and maintenance in addition to base rent — shifting nearly all operating costs from landlord to tenant.
NOI	Net Operating Income	Net operating income is a property's total income from rent and other sources, minus operating expenses, before accounting for debt service (mortgage payments).
PITI	Principal, Interest, Taxes & Insurance	PITI stands for Principal, Interest, Taxes, and Insurance — the four components that typically make up a full monthly mortgage payment.
PMI	Private Mortgage Insurance	PMI is insurance required on most conventional loans with a down payment below 20%, protecting the lender — not the borrower — if the loan defaults.
POC	Paid Outside of Closing	POC, marked next to a line item on a Closing Disclosure or settlement statement, means that fee was already paid before closing — such as an appraisal fee paid directly to the appraiser — so it isn't collected again as part of the funds due at closing.
PUD	Planned Unit Development	A planned unit development is a zoning designation for a project designed as a single, cohesive development — often mixing housing types, shared amenities, and common areas — governed by its own set of rules rather than standard lot-by-lot zoning.
QOF	Qualified Opportunity Fund	A Qualified Opportunity Fund is an investment vehicle that channels capital gains into designated Opportunity Zones in exchange for federal capital gains tax deferral and, if held long enough, potential exclusion of gains on the new investment.
RCNLD	Replacement Cost New Less Depreciation	RCNLD is the cost approach's core calculation: the cost to build the improvements new today, minus accumulated depreciation from age, wear, and obsolescence — added to land value to estimate total property value.
REIT	Real Estate Investment Trust	A REIT is a company that owns, operates, or finances income-producing real estate and trades on public markets like a stock, letting investors gain real estate exposure without buying property directly.
ROI	Return on Investment	ROI measures the total profit from an investment relative to its cost, expressed as a percentage — a general-purpose metric used across real estate and other investment types.
STR	Short-Term Rental	A short-term rental is a property rented out for brief stays — typically under 30 days, as on Airbnb or Vrbo — as opposed to a traditional lease, often generating higher nightly income but with more variable occupancy and higher management effort.
TI	Tenant Improvement Allowance	A tenant improvement allowance is a dollar amount, usually expressed per square foot, that a commercial landlord contributes toward customizing a space for a new tenant — build-out, flooring, walls, and fixtures.
TIC	Tenancy in Common	Tenancy in common lets two or more people own a property together in unequal or equal shares, each free to sell or will their share independently — with no automatic right of survivorship to the other owners.
USDA	U.S. Department of Agriculture (loan)	A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture for eligible buyers purchasing in designated rural and suburban areas, often with no down payment required.
VA	Department of Veterans Affairs (loan)	A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible service members, veterans, and surviving spouses, often requiring no down payment and no ongoing mortgage insurance.
VOE	Verification of Employment	A verification of employment is a lender's direct confirmation with a borrower's employer of their job status and income, typically performed both during underwriting and again just before closing.

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Definitions are provided for general educational purposes and are not financial, legal, tax, or real estate advice. Rules vary by transaction and location - verify important decisions with qualified professionals.

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