Investor loan glossary: what the terms on your term sheet mean.

The full monthly payment on a property: principal, interest, property taxes, insurance and any HOA or association dues.

PITIA is the bottom half of the DSCR: one month of principal and interest, one-twelfth of the annual tax bill, one-twelfth of the insurance premiums (hazard, plus flood where it’s required) and any HOA or condo dues. Without association dues it’s often written PITI.

Anything that raises PITIA lowers your ratio on the same rent: a tax bill reassessed at your purchase price, a coastal or wind insurance quote, a new special assessment. Get real tax and insurance figures before you rely on a DSCR estimate. Lenders also measure cash reserves in months of PITIA.

The loan amount divided by the property’s value, as a percentage. The main leverage limit on rental and bridge loans.

A $240,000 loan on a $320,000 property is 75% LTV, which leaves 25% equity. On a purchase, lenders usually measure against the lower of the price and the appraisal; on a refinance, against the appraised value.

DSCR lenders published 80% maximum LTV on purchases in October 2026, with 85% at a few lenders for 720–740+ credit. Rate-and-term refinances topped out at 75–80% and cash-out refinances at 70–80%, most at 75%. Lower LTV also tends to price better, because the lender has more of a cushion if values fall.

The loan divided by the project’s total cost: purchase price plus the rehab or construction budget.

Project lenders size on cost because the value before the work doesn’t reflect what you’re spending. Buy at $210,000 with a $55,000 rehab and your cost is $265,000. A lender funding 90% of the purchase ($189,000) and 100% of the rehab ($55,000) lends $244,000, about 92% LTC.

Published October 2026 limits: fix and flip lenders fund 85–100% of the purchase price depending on experience and 100% of the rehab; ground-up construction lenders fund 82.5–90% of total cost. Project lenders also cap the loan at a share of the ARV, and the lower limit wins.

The appraiser’s estimate of what a property will be worth once the planned renovation or build is finished.

The appraiser values the finished property from sales of comparable renovated homes, using your scope of work and budget. Project lenders cap the total loan at a share of it: 70–80% of ARV at fix and flip lenders in October 2026, often 60–70% for new investors or heavy rehabs, and 65–75% of completed value on ground-up construction.

Continue the LTC example. If the ARV comes in at $320,000 and the lender caps at 75%, the loan stops at $240,000, $4,000 short of what LTC alone allowed, and you bring the difference at closing. ARV also sizes the refinance in a BRRRR, where lenders publish about 75% of the new value.

A quick screen for flips: keep your offer at or below 70% of the after-repair value, less the repair budget.

On a house with a $280,000 ARV that needs $40,000 of work, the rule caps your offer at $156,000 ($196,000 minus $40,000). The other 30% of ARV is meant to cover buying, holding and selling costs, financing and your profit.

It’s an investor’s rule of thumb, not a lender requirement. Lenders apply their own ARV caps, and in expensive markets or on light rehabs the 30% margin can be more than a deal needs.

Your total monthly debt payments divided by your gross monthly income. Conventional mortgages qualify on it; DSCR loans don’t.

A borrower with $9,000 a month of income and $3,600 of monthly payments (the new mortgage, other housing, a car loan and card minimums) has a 40% DTI. Fannie Mae’s Selling Guide sets a 36% maximum for manually underwritten loans, up to 45% with qualifying credit and reserves, and 50% for loans approved through its Desktop Underwriter system.

That limit is where many self-employed investors get stuck: depreciation and write-offs shrink the income a conventional lender can count. A DSCR loan never calculates DTI. The property’s own ratio replaces it.

The appraiser’s estimate of a property’s long-term market rent, based on comparable rentals nearby. Fannie Mae’s version is Form 1007.

When a rental lender orders the appraisal, the appraiser also estimates what the property would lease for, using comparable rentals. For years that has been Form 1007, the Single-Family Comparable Rent Schedule. 2–4 unit properties go on Form 1025, the small residential income property report, which carries its own rent analysis.

The forms are changing. For loans sold to Fannie Mae and Freddie Mac, the redesigned appraisal report (UAD 3.6) is mandatory for new reports submitted on or after November 2, 2026. Market rent moves into its Rental Information section, and Freddie Mac says a separate 1007 usually won’t be completed. DSCR lenders set their own appraisal rules, so you’ll still hear “the 1007.” Whatever the form, most lenders count the lower of market rent and your lease.

How rental lenders count Airbnb and VRBO income: a third-party projection on a purchase, the last 12 months of bookings on a refinance.

On a purchase there’s no booking history, so lenders accept a projection from a data provider such as AirDNA, or fall back on long-term market rent. On a refinance they use the trailing 12 months (T12) of actual bookings. Expect a haircut: Easy Street applies none for professional short-term rental operators and 25% for newer ones.

Short-term rental loans also run tighter on credit and leverage. Lima One published a 700 minimum score and 75% LTV on purchases, 70% on cash-out, in October 2026.

Cash or liquid assets you still have after closing, measured in months of the property’s payment (PITIA).

Published DSCR reserve rules in October 2026 ran from none (Kiavi) to 3 months (Defy) and 3–9 months (Easy Street), with 12 months in one foreign-national program (Angel Oak). On a $2,375 PITIA, 6 months is $14,250.

Lenders count reserves separately from the down payment and closing costs, so budget for all three when you work out the cash a purchase needs.

Rehab or construction funds the lender holds back at closing and releases in stages as work is completed and inspected.

The purchase or land portion funds at closing; the work budget sits in a holdback. You finish a stage, request a draw, the lender inspects in person, by photo or by video, and pays for that stage. Published turnaround in October 2026 ran from same-day virtual inspections (LendingOne) to 24 hours (Lima One) and 48 hours (Easy Street).

Interest is usually charged only on funds drawn, so the monthly bill climbs as the project progresses. Draws generally pay for work already done, so keep enough cash to fund the first stage and to cover the gap between finishing a stage and getting paid for it.

Part of the loan set aside at closing to make the monthly interest payments for a set period.

Common on construction and value-add bridge loans, where the property earns nothing during the work. Roc and Civic publish a 1-month interest reserve on ground-up loans. The reserve keeps payments current without cash from your pocket, but it’s funded by the loan, so it raises the balance that accrues interest and points. Ask what happens to any unused reserve at payoff.

How a short-term loan gets paid off: by selling the property or by replacing the loan with long-term financing.

Short-term lenders underwrite the exit almost as closely as the property. A sale exit is tested against the ARV and recent comparable sales. A refinance exit is tested against what a long-term lender would lend; Roc’s stabilized bridge program, for one, looks for an exit DSCR of 1.10 or a sale. The 12- to 24-month term is the deadline. Some construction programs offer 3- or 6-month extensions (Kiavi); ask what they cost before you need one.

How long you must have owned a property before a lender will refinance it on its new appraised value.

Seasoning decides whether a refinance uses today’s appraisal or what you paid. A typical DSCR cash-out rule in October 2026 was 90 days of ownership; refinance sooner and some lenders cap the loan at your cost basis, the purchase price plus documented rehab. A few non-QM lenders advertise no seasoning, and lenders that made your rehab loan often waive it when they refinance it themselves.

Seasoning matters most in a BRRRR, where the whole plan rests on borrowing against the higher value.

A refinance soon after an all-cash purchase that returns the cash you paid, without waiting out the usual seasoning period.

Paying cash can win a deal or close it in days. Delayed financing then refinances the property so the cash comes back for the next one. Kiavi publishes a delayed-purchase refinance within 6 months of buying, and Angel Oak lists delayed financing too. Ask how the lender sizes it: some tie the loan to your documented purchase cost rather than a new appraisal.

A new loan larger than the current balance on a property you own, paying you the difference in cash.

A rate-and-term refinance replaces a loan with one of about the same balance to change the rate or term. A cash-out refinance borrows more against your equity. A rental appraised at $400,000 with $180,000 owed can support a $300,000 loan at 75% LTV, about $120,000 out before closing costs, as long as the rent still covers the bigger payment at the lender’s minimum DSCR.

DSCR lenders published 70–80% maximum cash-out LTV in October 2026, most at 75%, and 60% at lower scores at one lender. Easy Street treats a refinance as cash-out once proceeds pass $2,000.

A loan on investment property that neither the borrower nor their family will live in, made for a business purpose rather than a personal one.

Every Goldstein Lending loan is a business-purpose loan on non-owner-occupied property. Federal Truth in Lending rules (Regulation Z) treat credit to buy, improve or maintain a rental property that isn’t owner-occupied as business credit, and the official commentary says that if the owner expects to live in the property more than 14 days in the coming year, it can’t be considered non-owner-occupied.

Business-purpose loans fall outside many consumer-mortgage rules, so lenders typically ask you to sign an occupancy and business-purpose statement and may check where you live. A home that you or a family member will live in needs a residential mortgage instead. This is a general description, not legal advice.

Taking title and the loan in a limited liability company or corporation instead of your personal name.

Investor lenders lend to entities, and Lima One, Roc and Civic require one on their rental loans. Lenders typically want the entity’s formation papers and operating agreement, its IRS EIN confirmation and a current good-standing certificate from the state, plus a personal guarantee from the owners. Whether to use an LLC, and how to set it up, is a legal and tax question for your attorney or CPA.

A promise by the owners of a borrowing LLC or corporation to repay the loan personally if the entity doesn’t.

Lending to an LLC rarely means lending to the LLC alone. Griffin, for example, lends to LLCs with a personal guarantee from the owners, and most investor lenders do the same. The guarantee is why your credit score and reserves still matter on an entity loan.

On a recourse loan the lender can pursue the borrower or guarantor for any shortfall after a foreclosure; on a non-recourse loan it is limited to the property.

Full recourse is common on short-term investor loans. Rental portfolio loans vary: RCN and Lima One describe theirs as non-recourse, LendingOne offers both, and Roc and Civic lend full recourse. Non-recourse loans normally keep carve-outs, often called bad-boy guarantees, that restore personal liability for acts such as fraud or transferring the property without consent. The exact terms are in the guaranty, which your attorney should read.

Pledging a property as security for more than its own loan, so several properties back the same debt.

If a cross-collateralized debt goes into default, every pledged property is at risk, and you can’t sell or refinance one without the lender releasing its lien. Lenders like it because strong properties support weaker ones; investors accept it to borrow more, or to finance several rentals in one closing. It’s built into every blanket loan. Read the release terms before you sign.