Daily Interest to Declaration of Restrictions

 

Daily Interest

The daily interest is the current interest charge for each day. The daily interest is used with prepaid expenses and per diem assessments. Interest rates are still typically indicated as annual rates. The daily interest rate is usually calculated as the current principal balance times the annual rate, divided by 365 days.

Damper

The damper is the hinged lid in a fireplace flue that controls the draft coming in and out of the fireplace. The damper is best kept closed when the fireplace is not being used.

Data Plant

With mortgage loans and real estate appraisals, the data plant is the collection of data, research and relative information that an appraiser has brought together for a real property project.

Datum

The datum is a real estate surveying term referring to the level surface from which elevations are measured. Every large city has a datum, although most surveyors base their work off of the U.S. Coast Guard & Geodetic Survey datum.

Daylight Basement

See the Walk-Out Basement entry.

D-Credit

An informal term referring to borrowers and applicants with extremely damaged and abysmal credit, usually with credit scores below 500. The only financing hope for D-credit borrowers would be expensive non-conforming loans, sub-prime loans and hard money programs. D-grade borrowers are often currently in foreclosure, bankruptcy or repossession-or have just completed such actions within the past year. Consumers can still be graded “D” when the foreclosure, bankruptcy or repossession is two to five years old if that consumer has not made strides in rebuilding credit. However, with proper attention to debt payments, a D-credit borrower can usually return to A-grade within five to seven years. Compare with the A-Credit, B-Credit and C-Credit entries.

De Minimus Planned Unit Development (PUD)

The de minimus PUD is a planned unit development (PUD) that has a relatively minimal amount of common property and improvements.

Deadbolt Lock

The deadbolt lock is a door lock that is engaged (or disengaged) by turning a key or latch, as opposed to the lighter spring lock. Most homes and apartments use deadbolt locks on exterior doors to add more security than a doorknob mechanism.

Deal Structure

The deal structure is the financing plan for an investment acquisition or development project. With leveraged (or financed) properties, the deal structure is the mixture of financing and investor capital used. Commercial projects usually use traditional debt, convertible debt, participating debt, joint ventures or a combination.

Dealer

See the Real Estate Dealer entry.

Debenture

The debenture is a type of bond that is not secured by any collateral of real estate or personal property. This bond is a negotiable security instrument, which means that it can be sold or transferred. Debenture bonds are used by both Fannie Mae (which uses them to raise money, which they then use to buy mortgage loans from the secondary mortgage market) and FHA (which give them to lenders when it takes back properties that have been foreclosed). These bonds are basically interest-earning promissory notes.

Debt

A debt is a borrower’s obligation to repay a lender. It is sometimes referred to as liabilities. In the mortgage loan industry, lenders examine an applicants debt load and debt-payment history to determine the riskiness of the proposed loan.

Debt Restructuring

At its most basic, a debt restructuring is a refinance. With commercial property financing, debt restructuring involves rearranging the property’s current and sought-after debt into one or a combination of various type of deal structure: i.e., participation loan, convertible debt, joint venture or traditional (institutional) loans.

Debt Service

The debt service is the regular payment amount required by a loan debt. With most mortgage loans, the debt service refers to the monthly or annual P&I payment.

Debt Service Coverage Ratio

Also called the “debt service coverage ratio,” the debt service ratio (DSR) is the a measurement of a property’s ability to handle a loan debt. The DSR is the projected debt service payments divided by the after-tax net operating income. Most commercial property lenders impose minimum DSR restrictions of 1.10 to 1.35. The most common DSR is 1.2, which means that lenders require the property to produce net operating income that is at least 120% higher than the projected debt service payments.

Debt Service Ratio

See the Debt Service Coverage Ratio entry.

Debt-To-Income Ratio

The debt-to-income (DTI) ratio is the primary method used by lenders to qualify prospective borrowers for mortgage financing. The DTI ratio is basically the total monthly debt payments divided by the gross monthly income. Two types of income ratios are normally considered by most lenders: the front-end (housing) ratio and the back-end (total debt) ratio. The housing ratio is the projected housing payment divided by the gross monthly income; the total debt ratio is the projected housing payment plus all other long-term debt payments, divided by the gross monthly income.

Deck

On most homes, the deck is an open platform, usually attached to the house or building and open to the elements.

Declaration of Condominium

Sometimes called a master deed, the Declaration of Condominium provides basic information about the community’s land, structures, buildings, common areas, division and map of units and description of intended usage. This is sometimes called declaration of covenants and restrictions.

Declaration of Restrictions

The declaration of restrictions is a method of establishing or preparing the covenants, conditions and restrictions (CC&R) for a subdivision. It is used when the list of restrictions becomes extensive and needs to be officially recorded.