Lument Work Notecards

NOI (Net Operating Income)

Gross rental income minus operating expenses. Does not include loan payments.

Gross Potential Rent (GPR)

Maximum income a property could generate if every unit was occupied at full market rent.

Vacancy & Credit Loss

Allowance subtracted from GPR to account for empty units and non-paying tenants. Typically 5-10%.

Effective Gross Income (EGI)

GPR minus vacancy and credit loss.

Cap Rate (Capitalization Rate)

NOI divided by property value. Used to value income producing properties. Cap rates and values move in opposite directions.

Property Value (Income Approach)

NOI divided by cap rate.

Operating Expenses

Costs of running a property including taxes, insurance, maintenance, management fees, and utilities. Not including debt service.

Debt Service

Total loan payments made over a given period — principal and interest combined.

DSCR (Debt Service Coverage Ratio)

NOI divided by annual debt service. Lument requires minimum 1.25x.

LTV (Loan to Value)

Loan amount divided by property value. Lument typically lends up to 70-75% on agency loans.

Amortization

Process of paying down a loan balance over time through regular payments.

Balloon Payment

Remaining loan balance due at the end of the loan term. Common in 10 year loans amortizing over 30 years.

Collateral

Asset pledged to secure a loan. In CRE the property itself is the collateral.

Foreclosure

Legal process by which a lender takes ownership of a property when a borrower defaults.

Default

When a borrower fails to make loan payments as agreed.

Recourse

Lender can go after borrower's personal assets if they default. Bridge loans are often recourse.

Non-Recourse

Lender can only take the property if borrower defaults — cannot go after personal assets. Agency loans are typically non-recourse.

Stress Testing

Running multiple scenarios (higher vacancy, higher rates) to see how a deal performs under adverse conditions.

Agency Loan

Loan backed by Fannie Mae or Freddie Mac. Used for stabilized multifamily properties.

Fannie Mae DUS

Delegated Underwriting and Servicing. Lument can underwrite and close loans on Fannie's behalf without approval on every deal.

Freddie Mac Optigo

Freddie Mac's multifamily lending program. Competes with Fannie Mae on stabilized multifamily deals.

HUD/FHA MAP

Multifamily Accelerated Processing. HUD program for multifamily properties. Government insured, lowest rates, longest terms, slowest to close.

Bridge Loan

Short term (2-3 year) floating rate loan for properties in transition. Used for value-add, lease-up, or transitional situations.

Permanent Loan

Long term fixed rate loan (typically 10 years) for stabilized properties. Agency loans are permanent loans.

Balance Sheet Lending

Lument lends its own money rather than packaging the loan for Fannie or Freddie. Bridge loans are balance sheet loans.

Mortgage Backed Security (MBS)

Pool of loans packaged and sold to investors by Fannie or Freddie. How capital from Wall Street funds apartment buildings.

Term Sheet

Non-binding document outlining proposed loan terms issued by Lument before formal application.

SOFR (Secured Overnight Financing Rate)

Benchmark floating interest rate that replaced LIBOR. Bridge loans are priced as SOFR plus a spread.

Spread

Additional percentage added on top of SOFR to determine borrower's total rate. Reflects lender's profit and deal risk.

Fixed Rate

Interest rate that stays the same for the life of the loan. Typical for agency loans.

Floating Rate

Interest rate that moves with a benchmark like SOFR. Typical for bridge loans.

Interest Rate Cap

Insurance product that limits how high a floating rate can go. Lument often requires borrowers to purchase one on bridge loans.

Federal Funds Rate

Rate set by the Federal Reserve that influences all other interest rates including SOFR.

Multifamily

Apartment buildings of any size. Lument's core business.

Seniors Housing

Residential properties designed for older adults. Includes independent living, assisted living, memory care, and skilled nursing.

Independent Living (IL)

Seniors housing for self sufficient residents. No medical care provided.

Assisted Living (AL)

Seniors housing for residents needing help with daily activities. Staff on site 24/7.

Memory Care (MC)

Specialized seniors housing for residents with Alzheimer's or dementia.

Skilled Nursing Facility (SNF)

Most medically intensive seniors housing. Heavily regulated and reimbursed by Medicare and Medicaid.

Affordable Housing

Residential properties with income restrictions on tenants. Rents restricted based on Area Median Income (AMI).

LIHTC (Low Income Housing Tax Credit)

Pronounced "lie-tech." Federal program that gives tax credits to developers who build affordable housing.

AMI (Area Median Income)

Benchmark used to determine eligibility for affordable housing. Tenants must earn below a certain percentage of AMI.

Capital Stack

Layers of funding in a real estate deal from most senior (safest) to most junior (riskiest). Senior debt, soft debt, tax credit equity, developer equity.

Soft Debt

Government grants or subsidized loans with flexible repayment terms. Common in affordable housing deals.

Origination

Process of sourcing and bringing in new loan deals. Handled by Lument's relationship managers.

Underwriting

Process of analyzing a deal to determine if it's a safe loan. Includes property, market, and borrower analysis.

Credit Committee

Group of senior Lument people who review underwriting reports and make final loan approval decisions.

Loan Servicing

Administrative management of a loan after closing. Includes collecting payments, maintaining escrows, and compliance reporting.

Asset Management

Monitoring the health of loans after closing. Includes reviewing financials, site inspections, and managing watch list loans.

Watch List

Internal list of loans showing signs of stress that require extra monitoring.

Due Diligence

Process of verifying all information submitted by the borrower before closing a loan.

Closing

Final stage where legal documents are signed and loan funds are transferred to the borrower.

Stabilized Property

Property with high occupancy and steady income. Required for agency loans.

Value-Add

Property that needs renovation or lease-up to reach its full income potential. Typically financed with a bridge loan.

Occupancy Rate

Percentage of units currently rented. Lument gets cautious below 90% for agency loans.

Rent Roll

Detailed list of every unit in a property showing unit type, square footage, market rent, actual rent, and occupancy status.

Submarket

Specific geographic area within a larger market used for comparison and analysis.

Comparable Properties (Comps)

Similar properties used to benchmark rents, occupancy, and values.

Maturity Wall

Large wave of loans coming due at the same time requiring refinancing. In 2026 approximately $162 billion in multifamily loans are maturing.

Exit Strategy

How a borrower plans to pay off a bridge loan — either refinance into permanent financing or sell the property.

Execution

Which loan product and lender combination delivers the best terms for a borrower.

Lease-Up

Period when a newly constructed property is filling up with tenants before reaching stabilized occupancy

Appraisal

Independent assessment of a property's market value. Required by Lument before closing a loan.

Income Approach

Valuation method using NOI and cap rate. Most common method for CRE

Sales Comparison Approach

Valuation method comparing the property to recent sales of similar properties.

Cost Approach

Valuation method estimating what it would cost to rebuild the property from scratch.