Builders Commercial Capital Group, LLC (BCCG)

Master Glossary of Terms

Mortgage Note Investment Participation Program

This glossary is provided for educational and informational purposes to help prospective investors, borrowers, lenders, and transaction professionals understand terms commonly used in BCCG investment summaries, offering memoranda, loan participation agreements, certificates, escrow documents, and related transaction materials.

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A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Property Types | Loan Types | Third Parties

A

Acquisition Loan: Financing used to purchase property.

Administrative Lender: BCCG acting as originating lender, administrative lender, participation administrator, servicer, or transaction coordinator.

Amortization: Scheduled repayment of loan principal over time.

Appraisal: An independent property valuation prepared by a licensed appraiser.

Appraised Value: The value assigned to collateral property by an independent appraiser.

Assignment of Mortgage: A document assigning rights or beneficial interests in a mortgage loan.

B

Balloon Payment: A large principal payment due at loan maturity.

Blanket Loan: One loan secured by multiple properties.

Borrower: The party receiving loan proceeds and obligated to repay the loan.

Borrowing Entity: The legal entity responsible for repayment and loan document performance.

Bridge Loan: Short-term financing until sale, refinance, stabilization, or permanent financing.

Build-to-Rent: Homes constructed for long-term rental use.

C

Capital Stack: The combined debt and equity used to finance a project.

Certificate Holder: The registered owner of a Loan Participation Certificate.

Closing Agent: The title company, attorney, or settlement agent handling closing and escrow.

Closing Date: The date loan documents are executed and funding occurs.

Collateral: Property pledged as security for repayment of a loan.

Construction Budget: The approved budget for construction costs and project expenses.

Construction Draw: A scheduled release of loan funds during construction.

Construction Loan: Financing used to build or improve real property.

Construction-to-Permanent Loan: Construction financing that converts to long-term financing.

Cross-Collateralization: Multiple properties securing one loan.

Cross-Default: Default under one obligation triggering default under another.

D

Deed of Trust: A recorded security instrument securing repayment of a loan.

Default: Failure to perform required obligations under loan documents.

Default Interest Rate: A higher interest rate that may apply after default.

Distribution: Funds paid to investors from interest, principal, DOSR, or other approved sources.

DOSR: Due-On-Sale Remittance payable upon sale, refinance, payoff, or disposition of collateral.

Due Diligence Repository: A secure folder containing transaction documents, reports, exhibits, and investor materials.

E

Entitled Land: Land approved for future development.

Escrow Agent: The independent party holding and disbursing funds under escrow instructions.

Escrow Deposit: Investor funds deposited with the escrow agent before closing.

Exit Strategy: The expected repayment event, such as sale, refinance, or permanent financing.

F

First Position Mortgage: The senior lien against the property.

Fix-and-Flip Loan: Financing to acquire, renovate, and resell property.

Funding Instructions: Written instructions explaining how and where investor funds should be deposited.

G

General Contractor: The party responsible for managing construction work.

Guarantor: A party agreeing to guarantee repayment or performance of a loan obligation.

H

Hard Money Loan: Asset-based financing primarily secured by collateral.

HUD-1 Settlement Statement: A settlement statement showing closing charges and disbursements.

I

Improvements: Buildings, structures, fixtures, and enhancements on real property.

Interim Interest: Interest paid during the loan term before principal repayment.

Interest-Only Loan: A loan requiring interest payments only for a period of time.

Investment ID: The unique BCCG transaction identification number.

Investor: A person or entity purchasing Loan Participation Notes.

Investor Registry: BCCG’s official record of LPN ownership, certificates, transfers, and distributions.

J

Joint Venture: A business arrangement where parties collaborate on a project or investment.

K

Key Principal: A principal party whose experience, credit, management, or financial strength matters to underwriting.

L

Land Loan: Financing secured by undeveloped land.

Late Fee: A charge assessed when a required payment is late.

Letter of Intent: A preliminary expression of investment interest.

Lien: A legal claim against property securing payment of a debt.

Loan Participation Agreement: The agreement governing an investor’s LPN ownership and participation rights.

Loan Participation Certificate: A certificate evidencing beneficial ownership of Loan Participation Notes.

Loan Participation Note: A fractional beneficial interest in a mortgage loan.

Loan-to-Cost: The ratio of loan amount to total project cost.

Loan-to-Value: The ratio of loan amount to collateral value.

M

Maturity Date: The date the loan becomes due and payable.

Mechanic’s Lien: A lien filed for unpaid construction work or materials.

Mezzanine Loan: Subordinate financing usually secured by ownership interests.

Mixed-Use Property: Property combining residential and commercial uses.

Mortgage: A lien securing repayment of debt against real property.

Mortgage Loan: The underlying real estate loan being participated among investors.

Mortgage Note: The borrower’s written promise to repay the loan.

N

Net Proceeds: Funds remaining after costs, liens, and required charges are paid.

Non-Recourse Loan: Recovery is generally limited to collateral, subject to carve-outs.

Note Investment Amount: The principal amount of the mortgage loan offered for participation.

O

Offering Memorandum: A detailed document describing an investment opportunity, structure, risks, and exhibits.

Original Principal Balance: The original loan amount at closing.

Ownership Percentage: The investor’s proportional ownership interest.

P

Participation Amount: The dollar amount invested by a participant.

Participation Percentage: The investor’s proportional ownership interest.

Permanent Financing: Long-term financing replacing temporary or construction debt.

Portfolio Loan: A loan held by the lender rather than sold.

Price Per LPN: The cost to purchase one Loan Participation Note.

Principal Balance: The unpaid balance of a loan.

Private Mortgage Loan: A mortgage funded by private capital.

Projected Return: An estimate of anticipated investor earnings; not guaranteed.

Q

Qualified Prospective Investor: A prospective investor approved to receive offering materials and conduct due diligence.

R

Recorded Instrument: A legal document filed in county land records.

Refinance Loan: Financing replacing an existing loan.

Registered Holder: The owner of record listed in the BCCG Registry.

Renovation Loan: Financing for repairs or improvements.

Retainage: Construction funds held back until conditions are satisfied.

S

Security Instrument: A mortgage, deed of trust, assignment, or related collateral document.

Settlement Statement: A closing document showing funds received and disbursed.

Single-Family Residence: A residential property for one household.

Spec Construction Loan: Financing for a property built without a buyer under contract.

Syndication: Dividing a loan or investment into multiple participation interests.

T

Take-Out Financing: Permanent financing replacing interim debt.

Term: The period between closing and maturity.

Title Company: A company providing title insurance, settlement, and escrow services.

Title Insurance: Insurance protecting against covered title defects.

Trustee: A party named in a deed of trust with authority under the security instrument.

U

Underwriting: The process of evaluating collateral, borrower strength, project feasibility, risk, and repayment ability.

V

Vacant Land: Undeveloped real property.

Valuation: The process of estimating property value.

Value-Add Loan: Financing intended to increase property value.

W

Waterfall Distribution: The contractual sequence for distributing payments among investors.

Workout: A negotiated resolution of a troubled or defaulted loan.

X

Cross-Collateralized Loan: A loan secured by multiple assets or properties.

Cross-Default Provision: A clause allowing default under one obligation to trigger default under another.

Y

Yield: The rate of return earned or projected on invested capital.

Z

Zoning: Local government rules controlling how property may be used or developed.

Property Types

Build-to-Rent (BTR): Homes constructed for long-term rental use.

Build-to-Sell (BTS): Homes constructed specifically for resale upon completion rather than long-term rental occupancy.

Commercial Development: A project creating commercial-use property.

Condominium: An individually owned unit within a larger building or community.

Duplex: A property containing two residential units.

Entitled Land: Land approved for future development.

Fourplex: A property containing four residential units.

Hospitality Property: Hotels, motels, and lodging facilities.

Industrial Property: Property used for manufacturing, storage, or distribution.

Mixed-Use Property: A property combining residential and commercial uses.

Multifamily Property: A residential property containing five or more units.

Office Property: Property used for professional or business operations.

Residential Development: A project creating residential lots or housing.

Retail Property: Property used for stores, restaurants, or consumer services.

Self-Storage Facility: A property offering rentable storage units.

Single-Family Residential: A detached home designed for one household.

Special Purpose Property: A property designed for a unique use.

Townhome: An attached residential unit sharing one or more walls.

Triplex: A property containing three residential units.

Vacant Land: Undeveloped real property.

Warehouse: A building used primarily for storage and logistics.

Loan Types

Third-Party Professionals Utilized by BCCG

Accountant: Reviews financial information.

Appraiser: Provides an independent property valuation.

Architect: Designs buildings and improvements.

Attorney: Provides legal review and documentation.

BPO Provider: Provides a broker price opinion.

Closing Attorney: Coordinates legal aspects of closing.

Closing Coordinator: Manages transaction logistics and scheduling.

Construction Consultant: Evaluates construction feasibility and budgets.

Construction Inspector: Reviews construction progress.

Contractor: Performs construction work.

Engineer: Evaluates site and structural conditions.

Environmental Consultant: Evaluates environmental risks.

Escrow Agent: Holds and disburses funds during closing.

Insurance Provider: Issues required insurance coverage.

Listing Broker: Represents the property for sale.

Loan Servicer: Administers loan payments and reporting.

Municipal Authority: Issues permits and approvals.

Recording Office: Records real estate documents.

Realtor: Assists with property marketing and sales.

Surveyor: Verifies property boundaries and improvements.

Tax Professional: Provides tax analysis and guidance.

Title Attorney: Reviews title matters and resolves title issues.

Title Company: Provides title services and title insurance.

Specialty Consultant: Provides expertise for specific project needs.

Important Disclosure

This glossary is provided solely for educational and informational purposes. Definitions may be supplemented, modified, or superseded by specific transaction documents. Investors should review all transaction-specific documentation and consult their own legal, accounting, tax, and financial advisors before making any investment decision.