Real Estate Glossary

F

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports taken by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit report.

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, a government sponsored agency chartered by Congress to facilitate capital formation for residential mortgage loans. It purchases sells and guarantees conventional, VA and FHA mortgages. FNMA stock is publicly traded on the New York Stock Exchange.

Federal Deposit Insurance Corporation (FDIC)
A federal agency that insures deposits of member banks and savings associations.

Federal Home Loan Bank
Provides liquidity to supervised financial service companies such as savings and loans and credit unions. The bank system has several districts.

Federal Home Loan Board
The board which overseas the Federal Home Loan Bank systems.

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 enables lenders to loan a very high percentage of the sales price.

Federal Reserve Bank
The regulatory agency for many commercial banks and bank holding companies. They set monetary policy for the country and provide liquidity for supervised financial institutions.

Federal Trade Commission (FTC)
A federal agency that investigates and eliminated unfair and deceptive trade practices.

Federal Tax Lien
A lien attached to property for nonpayment of a federal tax.

Federal Tax Return
The U.S. government's method to identify individual and company's annual tax responsibility. The tax returns identify the income and taxes.

Federal Truth-In-Lending Act (TIL)
A federal law which requires lenders to disclose various settlement costs associated with a loan, including an annual percentage rate.

Fee Simple
The greatest possible interest one can have in a parcel of real estate, including the right to dispose of the property or pass it on to one's heirs.

FHA Mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

FICO Score
An acronym referring to "Fair Isaac Credit" ratings, which grade consumer's credit ratings with a numeric score.

Fiduciary
A person in a position of trust or responsibility with specific duties to act in the best interest of the client. Real estate brokers and mortgage brokers are fiduciaries.

Financial Depositor Institutions
Banks, savings and loans, or credit unions.

Finder's Fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

First Mortgage
A real estate loan which creates a primary lien against a parcel of real property.

Fixed Rate Mortgage
A loan that carries an unchangeable interest rate through its entire term.

Fixture
Personal property which, by virtue of being attached to real property, becomes a part of the real property.

Floating Interest Rate
The interest rate on a mortgage loan prior to its being "locked" or guaranteed by the lender.

Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

Flood Zone
An area designated by the federal government to be subject to flooding.

Floor Plan
Scale architectural drawing(s) showing details of a building's floor design and layout.

Folio Number
The identification number for a specific property. In some areas of the country, this number is used for tax assessment purposes. Aslo referred to as the assessor's parcel number, account number and UPC in different regions.

Forbearance
The act on the part of a lender (mortgagee) of refraining from taking legal action despite a mortgage being in a state of default.

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.

Freddie Mac (FHLMC)
The Federal Home Loan Mortgage Corporation, a quasi- governmental agency chartered to purchase residential loans from federally insured depository institutions and approved mortgage lenders.

Full Disclosure
Revealing all the known facts which may affect the decision of a buyer or tenant.

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.

Functional Depreciation
The loss of value to real estate due to improvements not providing the same level of usefulness as comparable properties.