Glossary
  
 
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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 congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.

Fannie Mae's Community Home Buyer's Program
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.

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.

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

FHA LOANS (Federal Housing Administration)
FHA loans are available to help people who can't necessarily afford a 10% down payment on their new home. If approved, the Federal Housing Administration will cover up to 97.75% of the purchase price, thus bringing the down payment to a low 3-5%.

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Who Qualifies?
Luckily, you don't have to have squeaky clean credit to be approved. FHA approval is dependent on your overall debt-to-income ratio. If your debt-to-income ratio is below 41% there is a good chance you will qualify. However, if you live in a city where even first-time buyers are paying over $180,000 for a house, your chances of being approved are slim to none.

Current Maximum FHA Mortgage Limits:
Current Standard-cost limits:
FHA 203 (b) Floors
One-family: $81,548 Three-family: $126,103
Two-family: $104,329 Four-family: $256,731
Current High-cost limits:
FHA 203 (b) Floors
One-family: $160,950 Three-family: $248,887
Two-family: $205,912 Four-family: $309,337

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

first mortgage
A mortgage that is the primary lien against a property.

fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.

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.

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.

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