Glossary

E - H

Effective Gross Income - The projected revenues expected to be collected in operating an income property. It consists of gross potential income less allowances for vacancies and collection losses.

Equity Capital - Funds invested by those who share in profits or tax benefits of a property.

Expense Ratio - The percentage of total fund assets that is used to cover expenses associated with the operation of a mutual fund. This amount is taken out of the fund's assets and lowers the return that fund holders achieve. These expenses include management fees and operating expenses. The management fee is the fee that is charged to the fund by the portfolio manager, and it is often a fixed percentage. The operating expenses are the expenses that the fund incurs in its operation and can include brokerage fees, taxes, investor services and interest expenses. The HIT does not assess a management fee or any fee on the sale or redemption of Units. All income earned by the Trust through its investments, less the actual costs for administration (operating expenses), is distributed to participants.

Expenses - Funds spent for ongoing operations.

Fair Market Rent (FMR) - Rent guidelines determined by HUD to be the cost of a modest, non-luxury rental unit in a specific market area for various size units (1 bedroom, 2 bedroom, etc.). With certain exceptions, it is the highest rent allowable for that market under the Section 8 program. FMR's are revised annually and are different for each community.

Fannie Mae - A congressionally chartered corporation that buys multifamily and single family mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market. Fannie Mae guarantees the monthly principal and interest payments on the mortgage-backed securities it issues. The securities are not backed by the U.S. government.

FHA (Federal Housing Administration) - The Federal Housing Administration is a government agency within the U.S. Department of Housing and Urban Development that provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals.

Fixed-Income Security - A security that pays a specific interest rate, such as a bond, money market instrument or preferred stock.

Freddie Mac - Federal Home Loan Mortgage Corporation - A congressionally chartered corporation that buys multifamily and single family mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market. Freddie Mac guarantees the monthly principal and interest payments on the mortgage-backed securities it issues. The securities are not backed by the U.S. government.

Ginnie Mae - Government National Mortgage Association (GNMA) - A government agency within the U.S. Department of Housing and Urban Development that buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because GNMA is an agency of the United States government, its payments are guaranteed by the full faith and credit of the U.S.

Government-Sponsored Enterprises (GSEs) - Privately owned, publicly chartered entities, such as Fannie Mae or Freddie Mac, created by Congress to reduce the cost of capital for certain borrowing sectors of the economy.

Gross Returns - The total return on investments before the deduction of management fees and expenses.

Historic Rehabilitation Tax Credit - Section 47 of the Internal Revenue Code that encourages private investment in the rehabilitation of historic properties such as offices, rental housing and retail stores. The tax credit is available for buildings that are individually listed in the National Register or contribute to a National Register Historic District and certain registered local historic districts. Properties must be income producing and must be rehabilitated according to standards set by the Secretary of the Interior.

HOPE VI - A program of the U.S. Department of Housing and Urban Development that provides grants to improve severely distressed public housing projects.

HUD - See Department of Housing and Urban Development.

HUD Income Guidelines - Income levels used for determining eligibility for HUD assistance programs, typically expressed as a percentage of the area median income.