The Terminology of Modern Real Estate

Admin on May 05, 2019

Understanding the terminology used in the real estate industry can help you to navigate these transactions more easily. Acronyms are widely used by lenders and real estate agents, making real estate jargon even more difficult to understand. Here are some of the most commonly used terms and their definitions.

FHA Loans

Loans backed or insured by the Federal Housing Administration are known as FHA loans. These mortgages require smaller down payments and may offer greater opportunities for first-time buyers.

HUD Programs

The Department of Housing and Urban Development, more commonly referred to as HUD, offers a number of programs to make housing more affordable and attractive for buyers and builders in low-income or depressed areas of major cities.


Comparative Market Analysis (CMA) reports providing added information on the selling values of homes in a particular neighborhood that has comparable features and amenities to a home being evaluated. CMA data can be used to determine an appropriate asking price for a home in the real estate market.

LTV Ratios

Loan-to-value (LTV) ratios are used by lenders to determine a borrower’s ability to repay a mortgage loan. The LTV ratio is determined by the amount of the loan compared with the value of the home. The down payment accounts for the difference between these two values. LTV ratios of 80 percent are usually required for most traditional loans, necessitating a down payment of 20 percent.

REO Properties

Real Estate Owned (REO) properties are usually the result of foreclosures in which the home or commercial space did not sell at auction. Ownership then reverts to the lender. REO properties are sometimes available at lower prices than comparable non-REO properties.


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