Course Description
Application of theoretical aspects of financial economics to explain real estate financial institutions and markets. Financial and economic methods are applied to residential and commercial real estate. Special topics include real estate in a portfolio, agency problems, and the influence of the legal environment.
Athena Title
Real Estate Finance
Non-Traditional Format
Course may be offered half semester or full semester.
Semester Course Offered
Offered every year.
Grading System
A - F (Traditional)
Course Objectives
Real Estate Finance applies financial economic theory to real estate financial institutions and markets to explain how changes in the economic or financial environment affect real estate financial decision making. The course concentrates on residential mortgages, commercial mortgages and mortgages on Wall Street. First, basic real estate finance focuses on fixed and adjustable rate mortgages with some insight on the refinancing decision. Next commercial mortgages are introduced with emphasis on underwriting, economics, and mortgage-backed securities. Lastly, the course looks into real options and the relationship to land value. The course integrates theory with practice with Excel programming.
Topical Outline
I. Background Material Introduction Instructions on how to use the TI BA II Plus calculator Instructions on how to logon to the computer topics Present Value and Mortgage Cash Flow 1.Computer Topic 1-Cash Flow and Present Value 2.Computer Topic 2-Annuities 3.Computer Topic 3-Yield and IRR II. Mortgages Fixed Rate Mortgages, 1.Computer Topic 4-Fixed Rate Mortgages Adjustable Rate Mortgages, 1.Computer Topic 5-Pricing Adjustable Rate Mortgages III. Creative Financing Creative Financing- 1.Computer Topic 6-Refinancing 2.Computer Topic 7-Junior Financing 3.Computer Topic 8-Builder Buy Downs and ZIMs IV. Mortgages on Wall Street Mortgages on Wall Street- 1.Computer Topic 9-Fixed Rate Mortgage Securities 2.Computer Topic 10-Synthetic Securities-IOs and POs 3.Computer Topic 11-Collateralized Mortgage Obligations(CMOs) V. Commercial Mortgages Commercial Mortgages- 1.Computer Topic 12-Commercial Mortgage Analysis and Underwriting 2.Computer Topic 13-Commercial Mortgage-Backed Securities Final: Exam is accumulative.
Syllabus