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 (FNMA)
The Federal National Mortgage Association, which is a congressionally chartered,
shareholder-owned company that is the nation’s largest supplier of home mortgage funds.
For a discussion of the roles of Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA),
see the Library.
Fannie Mae’s Community Home Buyer’s
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
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
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 mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA
loans, an FHA loan will often be referred to as a government loan.
firm commitment
A lender’s agreement to make a loan to a specific borrower on a specific property.
The mortgage that is in first place among any loans recorded against a property. Usually
refers to the date in which loans are recorded, but there are exceptions.
A mortgage in which the interest rate does not change during the entire term of the loan.
Personal property that becomes real property when attached in a permanent manner to real
flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is
required for properties located in federally designated flood areas.
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
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
Some administrators of 401(k)/403(b) plans allow for loans against the monies you have
accumulated in these plans. Loans against 401K plans are an acceptable source of down
payment for most types of loans.