Real Estate Glossary

H

Hazard Insurance
Casualty (fire and other damage) insurance placed on improvements (structures) on a parcel of real property. Also referred to as "homeowners insurance".

Holdback
A portion of funds held in escrow for the completion or repair of some aspect of improvements on a parcel of real estate. Generally, a holdback will be required by a lender at an amount equal to one and one-half times the cost of the item in question.

Home Equity Line of Credit
A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.

Homeowners Association
An organization of homeowners residing within a particular residential real estate development whose major purpose is to maintain and provide common areas and facilities in the development.

Homeowner's Insurance
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

Homeowners or Maintenance Fees
Payments made by property owners of a condominium or a unit in a PUD to the homeowners' association for expenses incurred in upkeep of the common areas.

Homeowner's Warranty
A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.

Homestead
Term used to describe three separate but related situations: (1) a tax exemption, (2) a tract of land limited in size and (3) a statutory condition designed to protect the interests of a spouse and lineal descendants.

Housing Ratio
The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income. This ratio is sometimes referred to as the top ratio or front end ratio.

Housing and Urban Development (HUD)
The federal government agency that oversees FHA.

HUD 1
A closing document required by HUD that itemizes the settlement costs of a loan. The closing agent generally prepares the document and the buyer receives it shortly after the loan is closed.

Hypothecate
To pledge property as security for a loan without giving up title or possession.