Face Value
Par value or the actual selling price of a security; the amount the issuer contracts to repay.

Fair Market Rent
An amount determined by HUD to be the cost of modest, non-luxury rental units in a specific market area.

Fair Market Value
The price at which property is transferred between a willing buyer and a willing seller, each of whom has reasonable knowledge of all pertinent facts and neither being under any compulsion to buy or sell.

Fallout
The percentage of loans in the pipeline expected not to close.

Farmers Home Administration (FmHA)
A government agency within the Department of Agriculture that operates under the Consolidated Farm and Rural Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.

FDIC
Federal Deposit Insurance Corporation. Originally established by the Banking Act of 1933 to protect depositors from loss. As a result of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the FDIC administers the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF).

Federal Home Loan Mortgage Corporation (FHLMC)
Created by Congress in Title III of the Emergency Home Finance Act of 1970 (12 USC 1451 et seq.). This stockholder-owned corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Also called Freddie Mac.

Federal Housing Administration (FHA)
A federal agency within the Department of Housing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and sets standards for construction and underwriting. The FHA does not lend money, nor does it plan or construct housing.

Federal Housing Finance Board (FHFB)
A regulatory agency created in 1989 to oversee the 12 Federal Home Loan Banks. This organization replaced the FHLBB.

Federal National Mortgage Association (FNMA)
The nation’s largest mortgage investor. Created in 1968 by an amendment to Title III of the National Housing Act (12 USC 1716 et seq.), this stockholder-owned corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Also called Fannie Mae.

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

FHA
See Federal Housing Administration.

FHA Loan
A loan made through an approved lender and insured by the Federal Housing Administration. While there are limits to the size of FHA loans, they are intended to finance moderately priced homes.

FHA Value
The value established by the FHA as the basis for determining the maximum mortgage amount that may be insured on a specific property. The FHA value is the sum of the appraised value of the property plus HUD/FHA’s estimate of closing costs.

FHLMC
See Freddie Mac.

Fidelity
A type of insurance that generally covers losses caused by dishonest or fraudulent acts by employees and others.

Fiduciary
One who acts in a capacity of trust and confidence for another.

Final Closing
The date upon which the permanent mortgage lender funds the mortgage loan.

Final Endorsement
The date upon which HUD/FHA accepts the credit instrument evidencing the permanent mortgage loan for mortgage insurance.

Finance Charge
A term defined in section 105 of the federal Truth in Lending Act (PL 90-321; 15 USC 1605), which generally includes all charges payable as an incident to the extension of a loan.

Financing Statement
Under the Uniform Commercial Code, a prescribed document a lender files with the Registrar of Deeds or Secretary of State, giving the name and address of the debtor and the secured party (lender), along with a description of the personal property securing the loan. It may show the amount of indebtedness.

First Mortgage
Mortgage holding priority over the claims of subsequent lenders against the same property.

Fixture
Personal property that has become part of the real estate.

Foreclosure
A proceeding in or out of court to extinguish all rights, title and interest of the owner(s) of a property in order to sell the property and satisfy a lien against it.

Freddie Mac
See Federal Home Loan Mortgage Corporation.

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

First Mortgage
Mortgage holding priority over the claims of subsequent lenders against the same property.

Fixture
Personal property that has become part of the real estate.

Foreclosure
A proceeding in or out of court to extinguish all rights, title and interest of the owner(s) of a property in order to sell the property and satisfy a lien against it.

Freddie Mac
See Federal Home Loan Mortgage Corporation.

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