REAL ESTATE DICTIONARY… F

Fair Housing Act – protects people from discrimination when they are renting or buying a home. The Fair Housing Act prohibits discrimination in housing because of:

— Race
— Color
— National Origin
— Religion
— Sex
— Familial Status
— Disability

Fannie Mae – Federal National Mortgage Associations or FNMA – Fannie Mae makes money partly by borrowing at low rates, and then reinvesting its borrowings into whole mortgage loans and mortgage backed securities. It borrows in the debt markets by selling bonds, and provides liquidity to loan originators by purchasing whole loans. More info at FannieMae.com

Federal Housing Administration (FHA) – is a government agency, that sets standards for construction and loan underwriting and insures loans made by banks and other private lenders for home building. The goals of this organization are to improve housing standards and conditions, to provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market.

FHA Loan – a mortgage that’s insured by the Federal Housing Administration (FHA). They are popular especially among first time home buyers because they allow down payments of 3.5% and credit score of 580+. However, borrowers must pay mortgage insurance (MI) premiums, which protects the lender if a borrower defaults.

Financing Charges – are a form of compensation to the lender for providing the funds to a borrower. These charges can include one-time fees, such as an origination fee on a loan, or interest payments, which can amortize on a monthly or daily basis. Finance charges vary from product to product, or lender to lender.

Fixed Rate Mortgage – a fixed-rate Mortgage is a mortgage loan that has a fixed interest rate for the entire term of the loan; either 15 or 30-year Loans.

For-Sale-By-Owner (FSBO) – is a home sold directly by the seller without the Listing Agent. Sellers are saving on real estate broker commissions (3-6%); however according to National Association of Realtors statistics, FSBO homes sell for 13% less than homes sold by agents.

Forbearance – in short, this allows you to make no payment, or a reduced payment, for an agreed upon period of time. This gives you enough time to regain your footing. From there, you will pick up with regular payments while making up those that you missed at the end of the loan. Note: lenders are most likely to agree to this if you can prove that your financial situation will change in the future, such as if you recently landed a job after a bout of unemployment.

Foreign Investment in Real Property Tax Act (FIRPTA) – this act authorizes United States to tax foreign persons on disposition of U.S. real property. More info at IRS.gov

Foreclosure – the action of taking possession of a property when the owner fails to keep up their mortgage payments. Foreclosure affects a person’s ability to get a credit/loan, buy new home and lowers the credit score.

Freddie Mac – Federal Home Loan Mortgage Corporation or FHLMC– is a government-owned corporation that buys mortgages and packages them into mortgage-backed securities. More info at FreddieMac.com