Definitions of Commercial Loan Words

[Russell Gronsky]

Sorry if these terms have been covered but when I do a search for "lockout", I get a lot of eviction posts, not much on financing. So, hopefully, all you savvy commercial multi-family investors can help out a newbie to the commercial scene.

I'm looking at a Freddie Mac Small Balance Loan and there are a few words I haven't come across in residential RE. What do these words mean:

- One of the terms Freddie boats is "coupon pricing". What is this?

- Another benefit Freddie talks about it is "declining prepayment". No idea what this is?

- As I was researching declining prepayment online, I found a Fannie Mae document that says they offer declining prepayments in several options, like a 10-year loan with a 5-5-4-4-3-3-2-2-1-1 declining premium with no lockout period. What is a lockout period? And finally, what does that statement mean with a 10-year loan with 5-5-4-4....etc?

I realize these are newbie questions and I'm sorry for peppering the forums. Any help would be greatly appreciated.