A/P Accounts Payable
An accounting term which represents a list of bills that are due, but that have not yet been paid.

A/R Accounts Receivable
An accounting term identifying amounts due to be paid into the property, but which have not yet been received.

The process of calculating what the annual cost of something will be, based upon the year-to-date actual numbers.  There are several different approaches to annualizing numbers, vs. the commonly utilized method of just dividing by the year-to-date dollar amount by the number of months and multiplying by 12.

The portion of the Balance Sheet that represents what the property owns; i.e. monies in various property accounts, monies owed to the property and the value of the buildings and equipment associated with the property.

Bad Debt
Amounts of money that are due to the property (generally unpaid rent or damages billed to a past resident), which have been determined to be “uncollectible”.  Often these amounts are identified once per year at the end of the fiscal year.

Balance Sheet
represents the Assets of the property and the Liabilities of the property, as well as the difference between the two, and owner equity, as of any particular date.

Budget-to-Actual (Variances)
Refers to the process of comparing the budgeted amount for any given period to what is actually occurring for that period, and identifying the variances.

Budget Narrative
An attachment to the budget submission that explains variances between the current year’s budget, anticipated year end, and next year’s budget.  It may also include a list of any components in any particular line item of the budget.

Budget Variance Report
Another name for “Income Statement”.

Capital Improvements (also called Fixed Asset Improvements)
Property improvements that we want to budget that are “major”; i.e. generally those that are written off (depreciated or expensed) over a period of time, and that cost more than $500.

The process of reclassifying (transferring) an item to the Asset section of the Balance Sheet, which was originally booked (posted or written-off) as an expense.

CNA Capital Needs Assessment
A report representing the long term, usually 20 years or greater, projection of the physical needs of a property.  It charts the effective remaining life of each item, and its replacement cost, and calculates the deposits to the replacement reserve account that are necessary to assure that there is enough money to replace the items when it is needed.

CO Certificate of Occupancy
The date given a property when construction has progressed far enough to allow for human habitation.  Often becomes the PIS Placed in Service Date for Tax Credit Properties.

CA Contract Administrator
The agency which monitors the monies that are given to a property by a regulatory agency, as specified in the Regulatory Agreement.  The contract administrator administers the funds and monitors compliance with regulations.

Contract Rent
Tenant Payment plus Subsidy Payment; the foundation for calculating Gross Potential Rental Income

Debt Service (see P & I)

When the bottom line of a financial report or budget is “in the red”, i.e. a negative number.

Delinquency Report
A list of the people who owe the property money; a.k.a. Accounts Receivable.

The same as “Net Equity” and “Owner’s Equity”; i.e. the difference between Assets and Liabilities

Escrow Accounts
Also known as “Reserve Accounts”.  These accounts are to accumulate monies for some future purpose.  The escrow accounts commonly utilized in housing are the Replacement Reserve Account and the Tax and Insurance Account.

What the property gives out, or pays, to outside vendors.

Fair Housing Act
Legislation first enacted in 1968 and expanded by amendments in 1974 and 1988, which provides HUD with investigation and enforcement responsibilities for fair housing practices.  The laws prohibit discrimination in housing (and lending) based on race, color, religion, sex, national origin, handicap or familial status.

Fiduciary Responsibility
The obligation to conduct oneself faithfully and to exercise sound judgment, while pursuing the goals of maximizing returns and minimizing risks, for an asset under one’s management and responsibility.

Financial Statements
Reports that summarize the impact of financial transactions that have occurred over any given period of time, and which show the current financial status.

Fiscal Year
The twelve month period of time upon which the property’s financial records are kept.  It does not have to be the same as a calendar year.

For-Profit Organizations
organizations doing business for the primary purpose of generating a profit, i.e. a return on their investment.

GL General Ledger Codes
four digit numbers which every bookkeeper and accounting person uses to keep track of the categories to which they post items.   They are listed on the Chart of Accounts in Appendix 1.

GPR Gross Potential Rental Income
The maximum amount of rental income that can be obtained in any given period, assuming that all the apartments are occupied and that all rental amounts are billed in full for the entire period.

HAP contract – Housing Assistance Payments
A written agreement between the owner of the property and the regulatory agency which specifies the amount of subsidy that will be paid to the property over a period of time.

revenue that the property receives from outside sources.

Income Statement
A report showing the Income that the property receives in relationship to the Expenses of the property and the difference between the two, which is Net Operating Income.  It is sometimes called a “profit and loss” statement, or a “monthly report.”  The report also shows the current month budget vs. actual performance, as well as year-to-date.

That portion of the debt/mortgage payment that is a fee for the privilege of borrowing the money; it is shown on the budget under “Expenses”.

what the property owes, i.e. unpaid obligations, the amount of security deposits owed back to the residents, and its mortgage.

MCA Maine Condominium Act
The governing law in Maine for all items related to Condominium Law and Management

Management Agreement
The agreement between the owner and the manager, approved by the regulatory agency, which specifies the management fees to be paid the manager, and other terms of expectations and responsibilities

MCS Market Comparability Study/Analysis
A study that identifies and analyzes properties that are similar to those in a given area, to compare rent levels and arrive at a determination of the fair market rent.

Mark-to-Market program
A program administered by OMHAR designed to bring the rents of privately owned multifamily properties with federally insured mortgages in line with the rents of the applicable local market.

Monthly (Financial) Report
Another term to describe Income Statements; see “Income Statements”

Mortgage Insurance Premium
A special mortgage insurance that is required when HUD grants a mortgage to an entity that has not contributed at least 20% of the mortgage amount prior to closing.

Negative Variance
a differential between the budgeted amount and the actual amount that is worse than what was expected (budgeted), and is unfavorable to the owner; i.e. when income is under budget or when an expense is over budget.

New Cash Position
The bottom line cash position on a budget; i.e. the number arrived at by taking the Net Operating Income, and subtracting the total outflows and adding the total inflows, (shown under the Other Cash Transactions section of the budget.)

Net/Owner Equity
the difference between Assets and Liabilities.  Also called Owner Equity, and Retained Earnings.

NOI Net Operating Income
Income less Expenses.

NPR Net Potential Rent
Gross Potential Rent less Vacancy Loss.

Non-profit Organizations
Organizations whose goals are generally a result of a higher purpose or a “mission”, which was established when the organization was formed.  They are usually governed by a Board of Directors.  What ever profits or surplus cash are realized does not get distributed to the owners, as in a For-Profit organization, but are kept as an asset of the property.

NRB Non-Rent Bearing Unit
See “Rent Free Unit” can be Police Officer, Site Manager

Occupancy Rate
A percentage relationship between the occupied units and the total units in a property.

Other Cash Transactions
Those monetary transactions that do not typically show up on an Income Statement because they are not, buy GAAP definition, Income or Expenses.  They are, however, items that affect the cash position of the property, and should be represented on an operating budget.

Other Cash Transactions – Inflows
That part of Other Cash Transactions that represents monies flowing into (+) the operations account.

Other Cash Transactions – Outflows
That part of Other Cash Transactions that represents monies flowing out of (-) the operations account.

Over Budget
When actual income is more than budgeted income (a positive variance), or when actual expenses are more than budgeted (a negative variance).

Payback period
The period it takes for you to recoup the initial investment costs, via increasing savings, of doing something that ultimately saves money.

PUPM Per unit per month
A method of comparing income and expenses to other properties

Positive Variance
a differential between the budgeted amount and the actual amount that is better than what was expected (budgeted), and is favorable to the owner; i.e. when income is over budget or when an expense is under budget.

In the world of bookkeeping, when something is recorded on the financial records of a property, it is “posted.”

That portion of a loan/mortgage that pays back the original amount borrowed; budgeted under Other Cash Outflows.

Profit and Loss (P & L)
See “Income Statement”

Project Based Subsidy
When the subsidy, Section 8 for example, is given directly to the property.  Sometimes called “deep subsidy”. The tenants only receive the subsidy if they continue to reside in that property; i.e. they can not transfer the subsidy to another property.  The alternative to this is “shallow subsidy.”

Prorating Expenses
The method of dividing up an expense between multiple properties; most common when discussing payroll expenses.

Public Housing
Housing Owned by HUD and Managed Locally by a Housing Authority. Governed by an ACOP (Admissions and Continued Occupancy Policy)

REAC – Real Estate Assessment Center
An organization created by HUD whose mission is to centralize the assessment of properties.  This organization sets the standard for performance, and conducts an on-going program of property inspections, analysis of financial and management reports (including tenant income, and rent/subsidy calculations), resident surveys, and review of resident appraisals.

RA Reasonable Accommodation
An exception needed by a disabled applicant or tenant to allow them to attend or live as anyone else would a housing unit or common space.

Regulatory Agreement
A binding agreement between the Owner of a property and the Regulatory Agency that is granting funding or subsidy.  It specifies the obligations, responsibilities and limitations of both parties.

RA Rental Assistance
provided by Rural Development’s MultiFamily Program

Rent-Free Unit (also known as Non-Rent Bearing or NRB)
An apartment which has been dedicated to a specific use,  that does not generate any rent.  The most common type of NRB unit is one given to a custodian or manager of the property and is also referred to as a concession.

RR Replacement Reserve (Escrow) Account
A restricted asset account that the owner makes deposits into on a monthly basis, to assure that adequate monies accumulate to cover major expenditures in future years.  Withdrawals from this account are only permitted for “replacement” of physical plant items, and only with agency approvals.

Replacement Reserve Funding
Money that is taken from the operations account and deposited into the replacement reserve account, to cover major capital expenditures and replacements that will occur over a property’s lifetime.

Replacement Reserve Releases/Drawdowns
Money that is taken from the replacement reserve account and transferred back into (deposited into) the operations account, in order to pay the bills for capital expenditures and replacements that have occurred. The withdrawals from the reserve account must be allowed and approved by the regulatory agency.

RSC Resident Service Coordinators
A staff position, endorsed by HUD as a project expense, that provides support and resource coordination for residents seeking to become or remain self-sufficient.

Section 504 Self Evaluation and Transition Plan
This evaluation is an assessment of the property’s compliance with the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act physical plant requirements.  The transition plan identifies inadequacies, and the property’s plan for rectification.

Section 8
A housing assistance payments program, authorized by the Housing and Community Development Act of 1974.  Section 8 is a subsidy provided either to the tenant directly, via a certificate or voucher, or to a property (this is called project-based subsidy).  Section 8 monies can be offered through a State or Local Housing Authority, or directly from HUD.

Security Deposits
The amount which the tenant pays before moving into a unit, which is used to offset unpaid rent or damages.

Service Animal (Assistance Animal)
An animal required by an RA Reasonable Accommodation due to a disability

Surplus Cash
The dollar amount, determined by the CPA’s and the Regulatory Agency, that is left over after the property’s financial obligations are met for the past fiscal year.  For-profit owners are able to have surplus cash distributed to them.

The difference between the tenant rent and the contract rent for the unit.  Also called a “Housing Assistance Payment.”

LIHTC Low Income Housing Tax Credit Program
Also known as the Tax Credit Program. A way of obtaining financing to develop low-income housing.  Government programs provide dollar-for-dollar credit toward taxes owed by the property owner.  These tax credits can be sold, or used to back up bonds that are sold, to obtain financing to develop the housing.

T & I Tax and Insurance Account
An escrow account developed to save monies each month so that it is available to pay the tax and insurance bills when they arrive.  Some financial institutions and regulatory agencies require the funding of such an account.  Money is deposited (funded) and withdrawn (released) similar to the Replacement Reserve account.

Tenant Based Subsidy
Assistance from a Local, State or Federal Program that allows tenants to pay only a portion (i.e.30%) of their income toward the rent, with the program picking up the rest of the rent owed to Landlord.

Tenant Rent Payments
That portion of the Contract Rent that is paid by the tenant; the difference between the Contract Rent and the Subsidy Payment.

Turnaround Time (also called Make Ready)
The number of days it takes to make a unit ready for occupancy, upon a turnover.

Turnover Rate
The percent relationship between the number of units prepared for re-occupancy (i.e. move-outs) and the total units in a property.

Unit Days
The number of units in a property, multiplied by the number of days in a month results in the total unit days for that month.  Useful when determining the Vacancy Rate or Vacancy Loss.

Useful Life
Sometimes called “Effective Life” or “Remaining Useful Life”; the period of time that a particular component of the physical plant is expected to last.

Vacancy Loss
is the revenue that is lost as a result of units that are unoccupied.

Vacancy Rate
is the percent relationship between the vacant units and the total units in a property.

The difference between the actual line item on a budget, and the amount which was originally budgeted.  A variance may be Positive or Negative

Also known often as Section 8 or S8 voucher, but can be from Shalom House, a Housing Authority or other programs.  It is a document guaranteeing an agency’s payment toward remaining rent after tenant has paid their portion.

YTD Year-to-Date
The period of time beginning the first day of the current fiscal year and ending as of any specific day


1930-C – Rural Housing (FmHA) Handbook for managers

1944.8 – RD/RHS tenant certification form which calculates their rent

4350.3 – HUD’s Occupancy Handbook; aka the “BIBLE”

4381.5 – HUD’s Management Agent Handbook

50059  – also known as “59’s”, which is HUD’s tenant certification form which calculates their rent

504 – the number of the federal regulation requiring that all properties meet the needs of the disabled and handicapped

AAF    – Annual Adjustment Factor – A percentage, determined by the Federal Government, that is applied to the current contract rents resulting in a new contract rent level

ADA   – American’s with Disabilities Act – specified requirements about housing structures meeting the needs of the disabled population

AFHMP – Affirmative Fair Housing Marketing Plan – marketing plan designed to meet the outreach requirements to persons of minority status; required for each government assisted property

A/P   – Accounts Payable; an accounting term indicating monies due to be paid to vendors but not done yet

A/R     – Accounts Receivable; an accounting term indicating monies due but not yet paid to us

ARM  – Accredited Resident Manager – the on-site manager training and designation offered by IREM

CMH – Certified Manager of Housing — training and designation offered by NCHM in Housing Mgmt

CMM – Certified Maintenance Manager —  training and designation offered by NCHM in Maintenance

CNA   – Capital Needs Assessment – required by HUD for their properties only; long term plan indicating useful life of physical components and replacement plans

COS    – Certified Occupancy Specialist — training and designation offered by NCHM in Occupancy issues

CPA  –  Certified Public Accountant — the person who performs an annual audit on the financial records of your property

CPM   – Certified Property Manager —  training and designation offered by IREM; Cadillac of market-rate housing industry; experience required

FHA – Federal Housing Administration

FMR – Fair Market Rents – for Section 8 properties

HAP    – Housing Assistance Payments – the money paid to the property; the difference between what the tenant pays and what the contract rent of the unit is

HAP Contract   – Housing Assistance Payments Contract – the contractual agreement that identifies the amount of rental assistance that will be provided by the government to the HUD properties

HUD   – Dept of Housing and Urban Development – a department of the government which develops and oversees affordable housing and fair housing issues.

IREM – Institute of Real Estate Management — industry training and certification organization

LIHTC – Low Income Housing Tax Credits – A way of obtaining financing to develop low-income housing.  Government programs provide dollar-for-dollar credit toward taxes owed by the property owner.

LLC    – Limited Liability Company; a legal term referring to a type of entity

M/I      – move in

M/O    – move out

MIP – Mortgage Insurance Premium

MREMA – Maine Real Estate Management Association

NAA   – National Apartment Association – national organization for training and support of housing managers;

NAHMA  – National Assisted Housing Managers Association; industry organization specializing in education and support for the government assisted housing manager

NCHM  –  National Center for Housing Management — industry training and certification organization

NHHFA  – New Hampshire Housing Finance Authority – same as MSHA only for New Hampshire

NNEHIF – Northern New England Housing Investment Fund – a Portland based syndicator of tax credit for the LIHTC Program.

NOI – Net Operating Income.

NRB unit – Non Rent Bearing, or a rent-free unit

NTT    – Notice to Terminate – also known at NTQ’s; an eviction notice

OCAF –  operating cost adjustment factors; the newest form of Annual Adjustment Factors, which increased rent levels annually.

PUPM – per unit per month; a method of comparing income and expenses to other properties

RA      – Rental Assistance – title given by Rural Development. equivalent to HUD’s housing assistance payments (sometimes called “section 8”)

RD      – Rural Development – previously FmHA; the development arm of the USDA’s housing programs

REAC – The Real Estate Assessment Center – Sets standards and assesses performance in the management of government assisted housing.

RHM – Registered Housing Manger  — “college” equivalent designation offered by NCHM after obtaining four pillars of training

RHS    – Rural Housing services – previously FmHA; now RD,  the management arm of the USDA’s housing programs

RR      – replacement reserve

STAR – designation offered by training organization, Spectrum, Inc; indicates competency in Rural Development RD housing program

T & I   – Tax and Insurance

TRACS  – Tenant Rental Assistance Certification System (+/-) – the manner in which we communicate with the regulatory agency about what our HAP requests are for each month; how we get the money

USDA – United States Department of Agriculture – the government dept under which FmHA/RD/RHS is

Formulas and Shortcuts 

  • To convert a decimal to a percentage: Move decimal point two places to the right; add a % symbol.
  • To convert a percentage to a decimal: Move decimal point two places to the left; remove the % sign
  • Variance = Budget $ Amount – Actual $ Amount
  • A positive variance is when the actual is better than the budgeted amount.
  • A negative variance is when the actual is worse than the budgeted amount.
  • When you see the word potential (as in potential rent), it is the same as budgeted
  • year (or month)-to-date = “actual”= what is currently happening
  • The word rate means a relationship between numbers. If we ask for a rate of something, we want a percentage.
  • If we ask for what the “loss” is, we are looking for a dollar
  • Vacancy Rate = $ lost in vacancies ÷ $ of income
  • Turnover Rate = #  of units that turned over  ÷  Total # of units
  • (simple) Occupancy Rate = # of occupied units ÷  total   #  of units
  • Occupancy Rate +   Vacancy Rate    =     100%
  • To calculate an increase in rent =  current rent + (% increase  x  current rent)
  • Annual Gross Potential Rent = monthly rent x   # of units  x  12 months
  • Gross Potential Rent –  Vacancy Loss = Net Potential Rent
  • Funding = monies leaving the operations account (-) = Outflows
  • Releases = monies coming into the operations acct. (+) = Inflows
  • NOI = Income – Expenses
  • Assets = LiabilitiesEquity; also:  Assets – Liabilities = Equity