F
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
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.
Fannie Mae Properties
Fannie Mae owns, manages and has available for sale, single-family detached homes, two- to four-
unit properties, condominiums and townhouses in a variety of neighborhoods. The number, type
and sales price may vary substantially. The homes vary in age and may require repairs. Fannie Mae
homes are sold through local real estate brokers whose contact information is provided in the
Fannie Mae Properties for Sale search results on homepath.com.
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 a term between 15 and 30 years. 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 mortgage 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.
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
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.
Fannie Mae Properties
Fannie Mae owns, manages and has available for sale, single-family detached homes, two- to four-
unit properties, condominiums and townhouses in a variety of neighborhoods. The number, type
and sales price may vary substantially. The homes vary in age and may require repairs. Fannie Mae
homes are sold through local real estate brokers whose contact information is provided in the
Fannie Mae Properties for Sale search results on homepath.com.
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 a term between 15 and 30 years. 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 mortgage 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.
| Real Estate and Loan Glossary of Terms |
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| Capital Real Estate and Loans Nannette Truong Kazan, Broker-Real Estate Specialist |
| Cell: 714 478-4940 |
| Fax: 949 266-8911 |
| Office: 949 679-3400 |
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