An Accessory Dwelling Unit (ADU) is a form of affordable housing that is a smaller, independent residential unit developed on the same lot as an existing single family home. ADUs may also be referred to as granny flats or accessory apartments.

Area Median Income (AMI) is the typical income in the regional housing market based on household size and county.

Area Median Income (AMI) is the typical income in the regional housing market based on household size and county.

A set of documents and descriptions that provide the specifications of the development and construction scope of work needed by a contractor to estimate the costs, timelines, labor requirements, and other details associated with construction (Also referred to as a "Request for Bid" or "RFB").

A site that has known environmental contamination (e.g., from previous land uses).

The percentage of age-, size-, and income-qualified renter households in the Primary Market Area that the subject property must capture to achieve a stabilized level of occupancy.

The cash flow over a given time period divided by the equity invested over that time period.

A Community Development Financial Institution (CDFI) is an organization that provides financial services to low-income communities and people who lack access to financing. In order to be a CDFI, the organization must be certified by the CDFI Fund.

Either you or your architect will certify that the final inspection is complete and that the development is ready for move in.

Documentation of any changes to a contractor's scope of work, including the cost and timeline on which that work will be completed, that you agree to.

A Community Housing Development Organization (CHDO) is a nonprofit, community-based organizations with the ability to develop affordable housing. In order to be designated, CHDOs must meet specific federal criteria for structure, capacity, experience, and legal status. The primary benefit of this designation is that CHDOs are eligible to use funds from a mandatory 15 percent set-aside of funding from HUD's Home Investment Partnerships (HOME) Program.

The Colorado Housing Investment Fund (CHIF) is a statewide fund created to address the need for affordable rental housing in Colorado.

A multifamily development model in which households have their own private spaces but share common spaces with other households. This could take the form of single family homes that have shared facilities or shared facilities within multifamily buildings.

A state tax credit that raises private-sector equity for affordable rental housing develoment. The program was modeled after the federal Housing Tax Credit program.

The Colorado Housing and Finance Authority (CHFA) strengthens Colorado by investing in affordable housing and community development. CHFA offers resources to strengthen homeownership, affordable rental housing, businesses, and communities.

A census tract meeting the income requirements to qualify as a Community Development Block Grant for an LMI Census Tract. This means that the median family income of households in the tract is below 50 percent (for a low-income tract).

A Community Development Financial Institution (CDFI) is an organization that provides financial services to low-income communities and people who lack access to financing. In order to be a CDFI, the organization must be certified by the CDFI Fund.

A Community Housing Development Organization (CHDO) is a nonprofit, community-based organizations with the ability to develop affordable housing. In order to be designated, CHDOs must meet specific federal criteria for structure, capacity, experience, and legal status. The primary benefit of this designation is that CHDOs are eligible to use funds from a mandatory 15 percent set-aside of funding from HUD's Home Investment Partnerships (HOME) Program.

Land owned by public or community-based institutions that is intended to be used for a community benefit beyond conservation or parks. This guide uses this term to avoid confusion with "public lands" also referring to designated parks, landmarks, and conservation areas, while also being inclusive of non-public institutions that may own land and have interest in using it similarly to public entities.

Funds (generally calculated as percentages of estimated costs) that are reserved to account for the unexpected costs involved in development. This is a way of accounting for the uncertainty involved in the estimates.

The Debt Service Coverage Ratio (abbreviated DCR, DSCR, or DSC) is the ratio of your net operating income to your debt payments. This reflects the amount of cushion a lender looks for.

Money owed to lenders, which must be paid back at regular intervals, often with interest, such as money received through a loan.

The Debt Service Coverage Ratio (abbreviated DCR, DSCR, or DSC) is the ratio of your net operating income to your debt payments. This reflects the amount of cushion a lender looks for.

Professional fees that developers and sometimes other project team members with ownership interest, such as property managers, do not collect, or defer payment of, until there is sufficient cash flow.

A budget that captures all costs required to build your project and place it in service, or have your project generally ready for occupancy.

Displacement can refer to two ideas in development. The first is residents of a neighborhood being forced to move out due to the inability to pay for rising housing costs and/or other social/cultural changes that make them feel unwelcome. The second is displacement that is caused by development activities that render a building uninhabitable for a period of time and may not offer the same affordability levels when it is reopened.

Amounts of your construction loan that you are able to access at different times in your project in order to pay contractors. You will set your draw schedule with your lender.

The Debt Service Coverage Ratio (abbreviated DCR, DSCR, or DSC) is the ratio of your net operating income to your debt payments. This reflects the amount of cushion a lender looks for.

The total potential gross income of a rental property minus the cost of vacancies and any unpaid rents.

Engagement fatigue or planning fatigue occurs when community members have been involved in too many community engagement processes and are less interested in participating or disillusioned with the process. This is a likely result when community members have been asked to engage but have not seen resulting action that aligns with their input.

Money paid by investors into the project in exchange for a percentage ownership of the project. Investors are paid back through the revenues generated by the project, either rental income or capital gains from selling the property.

Extraterritorial jurisdiction (ETJ) is a defined area outside but directly adjacent to a city's official limits that is still subject to some of the city's laws and regulations.

The general contractor (GC) is the organization responsible for providing the equipment, materials, labor, and other goods and services necessary to complete a development.

Funding given with no requirement of repayment. Some grants may have restrictions on how they can be used.

Income before taxes and other deductions are taken out.

A HUD program administered by state and local governments that provides funding for a range of activities related to affordable housing.

The cost of housing relative to a given income level. Housing is typically considered affordable if it represents 30 percent or less of an individual's or household's gross income.

A Colorado state fund that makes loans for development, redevelopment, or rehabilitation of housing to serve residents with low or moderate income.

The Housing Tax Credit (HTC or LIHTC) is the primary source of financing for the construction and preservation of affordable rental housing in the United States. Housing Tax Credits provide an incentive for investors to invest in affordable housing construction and preservation via a tax credit. Developers can apply for their development to be awarded tax credits and then investors will invest in the property in exchange for those tax credits, providing equity for the development. The HTC may also be referred to as the Low Income Housing Tax Credit.

Households paying more than 30 percent of their income for housing costs are considered "housing-cost-burdened." Those paying more than 50 percent of their income for housing costs are considered "severely cost-burdened" or "extremely cost-burdened."

An arrangement providing an option for the tenant to purchase the unit they are living in at the end of a specified period.

Leadership in Energy and Environmental Design (LEED) is a set of green building and development certification programs maintained by the U.S. Green Building Council.

The Housing Tax Credit (HTC or LIHTC) is the primary source of financing for the construction and preservation of affordable rental housing in the United States. Housing Tax Credits provide an incentive for investors to invest in affordable housing construction and preservation via a tax credit. Developers can apply for their development to be awarded tax credits and then investors will invest in the property in exchange for those tax credits, providing equity for the development. The HTC may also be referred to as the Low Income Housing Tax Credit.

A census tract meeting the income requirements to qualify as a Community Development Block Grant for an LMI Census Tract. This means that the median family income of households in the tract is below 50 percent (for a low-income tract).

The frequency with which losses are incurred (for example through loan defaults).

The Housing Tax Credit (HTC or LIHTC) is the primary source of financing for the construction and preservation of affordable rental housing in the United States. Housing Tax Credits provide an incentive for investors to invest in affordable housing construction and preservation via a tax credit. Developers can apply for their development to be awarded tax credits and then investors will invest in the property in exchange for those tax credits, providing equity for the development. The HTC may also be referred to as the Low Income Housing Tax Credit.

Median Family Income (MFI) - The median family income (MFI) is the median annual income for all families in a given geography (generally a metropolitan area or a non-metropolitan county). The U.S. Department of Housing and Urban Development uses MFI to calculate income limits for many of its programs. MFI is generally synonymous with the general use of the term Area Median Income (AMI), but it is common to see AMI used as a reference point that adjust for families of different sizes (e.g., 50% of AMI), whereas MFI specifically refers to the median for all families.

Generally, businesses owned by women, racial or ethnic minorities, or people from other groups that have historically been disadvantaged as business owners. Specific definitions and eligibility vary across jurisdictions.

An income range above 80 percent of AMI. The most common definitions are 80 to 100 percent of AMI or 80 to 120 percent of AMI.

A Neighborhood Revitalization Strategy Area (NRSA) is an area designated by a Community Development Block Grant (CDBG) grantee for targeted revitalization. This designation affords greater flexibility in undertaking economic development, housing, and public services using CDBG funds.

Net operating income (NOI) is the amount of income available after expenses.

Net operating income (NOI) is the amount of income available after expenses.

The costs incurred as a result of operating a property. This could include costs of insurance, staffing, repairs, utilities, property taxes, and resident services.

State-designated census tracts that are eligible for investments through private Opportunity Funds.

A formal (legal) agreement between organizations that outline the terms and conditions of their partnership.

An approach that allows you to start and complete a smaller segment of your project before moving onto the next.

Development costs that are incurred prior to construction, such as those described in the predevelopment section of this guide. This consists mainly of soft costs.

The base hourly rate paid to a majority of workers in a given area for a specific type of construction activity.

A Private Activity Bond (PAB) is a tax-exempt bond issued by state and local governments or agencies to provide financing for qualified projects.

Amounts of your construction loan that you are able to access at different times in your project in order to pay contractors. You will set your draw schedule with your lender.

The sum of all income anticipated from a development.

A Qualified Allocation Plan (QAP) is a document produced by a state housing finance agency (i.e., CHFA) that defines the priorities and processes related to the allocation of Housing Tax Credits.

A measure of financial profit or loss that factors in the time required to create the return. There are multiple measures used to calculate the rate of return, but the most common is the internal rate of return, which can be thought of as the annual rate of return on capital that is invested.

Real-estate-owned property (REO) is property owned by a bank (often as a result of foreclosure).

A portion of the progress payment that is retained until the contracted work is complete to ensure it is completed on time and to desired quality standards.

A change in the zoning code for a given area or zoning classification. For example, a parcel may be rezoned to allow for a greater variety of uses.

Sick building syndrome (SBS) refers to health-related effects residents may experience that are linked to the time they spend in the building when no specific illness or cause can be identified.

Structures designed for only a single family or household to occupy the building. Many single family homes are developed to be sold, but they are also an important source of rental housing in many communities. Single family structures can be attached to other adjacent buildings or detached.

A part of the construction process that focuses on preparing the site and addressing any land-related issues as part of the development. Examples include grading, excavation, adding utility connections, and major landscaping tasks.

More flexible loans, "soft loans," where repayment may be deferred, forgiven, or only required upon certain conditions, such as if there is excess cash flow. These generally come from the public or philanthropic sector.

A sources and uses of funds statement (also referred to as a 'sources and uses statement') summarizes a project's sources and amounts of financing compared to the uses of those funds across development costs.

A person or organization who will be impacted by or has a vested interest in the development or associated activities.

Housing that is affordable at a given income level in part because it is supported by some form of public financial resource that reduces the housing cost. In return for the public sector providing a subsidy, the developer or owner may be required to offer all or a portion of the units to particular populations, for example people with low incomes or disabilities, and/or older adults.

An income level that usually corresponds to an income range up to 50 percent of AMI. In some definitions, this refers to the entire range (e.g., 0 to 50 percent AMI), while in others it may be a particular band (e.g., 30 to 50 percent AMI).