Real Estate Glossary
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Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer
credit reports by consumer/credit reporting agencies and establishes procedures
for correcting mistakes on one's credit record.
fair market value
The highest price that a buyer, willing but not compelled to
buy, would pay, and the lowest a seller, willing but not compelled to
sell, would
accept.
Fannie Mae
Fannie Mae is a New York Stock Exchange company and the largest
non-bank financial services company in the world. It operates pursuant
to a federal charter and is the nation's largest source of financing for
home mortgages. Over the past 30 years, Fannie Mae has provided nearly
$2.5 trillion of mortgage financing for over 30 million families.
Fannie Mae's Community Home Buyer's ProgramSM
An income-based community lending model, under which mortgage insurers
and Fannie Mae offer flexible underwriting guidelines to increase a low-
or moderate-income family's buying power and to decrease the total amount
of cash needed to purchase a home. Borrowers who participate in this model
are required to attend pre-purchase home-buyer education sessions.
Fannie 97®
A financing option for a fixed-rate mortgage that offers home buyers
a 3 percent down payment loan with either a 25- or 30-year term. The mortgage
features a loan-to-value (LTV) percentage of 97 percent, and is designed
to expand homeownership opportunities for people with modest incomes.
Borrowers must take a pre-purchase home-buyer education session to qualify
for a Fannie 97 mortgage.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development
(HUD). Its main activity is the insuring of residential mortgage loans
made by private lenders. The FHA sets standards for construction and underwriting
but does not lend money or plan or construct housing.
fee simple
The greatest possible interest a person can have in real estate.
fee simple estate
An unconditional, unlimited estate of inheritance that represents
the greatest estate and most extensive interest in land that can be enjoyed.
It is of perpetual duration. When the real estate is in a condominium
project, the unit owner is the exclusive owner only of the air space within
his or her portion of the building (the unit) and is an owner in common
with respect to the land and other common portions of the property.
FHA coinsured mortgage
A mortgage (under FHA Section 244) for which the Federal Housing
Administration (FHA) and the originating lender share the risk of loss
in the event of the mortgagor's default.
FHA mortgage
A mortgage that is insured by the Federal Housing Administration
(FHA). Also known as a government mortgage.
finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage
loan for a prospective borrower.
firm commitment
A lender’s agreement to make a loan to a specific borrower on a specific
property.
first mortgage
A mortgage that is the primary lien against a property.
fixed installment
The monthly payment due on a mortgage loan. The fixed installment
includes payment of both principal and interest.
fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the
entire term of the loan.
fixture
Personal property that becomes real property when attached in a
permanent manner to real estate.
flood insurance
Insurance that compensates for physical property damage resulting
from flooding. It is required for properties located in federally designated
flood areas.
foreclosure
The legal process by which a borrower in default under a mortgage
is deprived of his or her interest in the mortgaged property. This usually
involves a forced sale of the property at public auction with the proceeds
of the sale being applied to the mrotgage debt.
forfeiture
The loss of money, property, rights, or privileges due to a breach
of legal obligation.
401(k)/403(b)
An employer-sponsored investment plan that allows individuals to
set aside tax-deferred income for retirement or emergency purposes. 401(k)
plans are provided by employers that are private corporations. 403(b)
plans are provided by employers that are not for profit organizations.
401(k)/403(b) loan
Some administrators of 401(k)/403(b) plans allow for loans against
the monies you have accumulated in these plans -- monies must be repaid
to avoid serious penalty charges.
fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is
sufficient to amortize the remaining balance, at the interest accrual
rate, over the amortization term.
