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Fannie Mae
The acronym for the Federal National Mortgage Association, which buys mortgages on the secondary market, repackages them and sells off pieces to investors. The effect is to infuse the mortgage markets with fresh money.
Fannie Mae (FNMA)
Corporation created by Congress that buys and sells residential mortgages. Fannie Mae provides funds for one in seven mortgages.
Farmer's Home Administration (FmHA)
An agency of the U.S. Department of Agriculture, that provides financing for purchasers of homes and farms in small towns and rural areas.
FDIC
See Federal Deposit Insurance Corporation.
Federal Deposit Insurance Corporation (FDIC)
Independent deposit insurance agency created by Congress to maintain stability and public confidence in the nation's banking system.
Federal Home Loan Bank Board (FHLBB)
Former name for the regulatory and supervisory agency of federally chartered savings institutions, now called the Office of Thrift Supervision.
Federal Home Loan Mortgage Corporation (FHLMC)
See Freddie Mac
Federal Housing Administration (FHA)
Government agency, division of the Department of Housing and Urban Development, which insures residential mortgage loans made by private lenders and sets standards for underwriting mortgage loans.
Federal National Mortgage Association (FNMA)
See Fannie Mae
Federal Reserve
Central bank of the United States and major regulatory agency for many commercial banks.
Fee Simple
Absolute ownership of real property. FHA - See Federal Housing Administration.
FHA
The Federal Housing Administration (FHA) is a federal organization that guarantees mortgage loans. The FHA does not loan money. There are many rules in the FHA designed to qualify buyers and property. The FHA qualifies the buyer according to gross income, and the property to be purchased must meet the FHA standards.
FHA Loan
Loan insured by the FHA for low to middle income homes, open to all qualified home purchasers.
FHLBB
See Federal Home Loan Bank Board.
FHLMC
See Federal Home Loan Mortgage Corporation. First Mortgage - The primary lien against a property.
FICO Score
A credit evaluation score developed by Fair, Isaac, and Co., used by lenders as one factor in making a loan decision. Some methods of improving a score are to establish and maintain a payment history on credit accounts, keep public records (bankruptcies, judgments, etc.) and collection accounts to a minimum, pay down loans, keep credit cards well below their limit, avoid late payments, and limit applying for new credit applied.
Fixed Rate
An interest rate that is fixed for the term of the loan.
Fixed-Rate Mortgage
A mortgage whose interest rate does not change for the life of the loan. Payments are also fixed.
Flood Certification
Federal law requires that you obtain flood insurance, if you obtain a mortgage, and you property is in a designated flood zone. This fee is paid to a third party to determine the flood zone status of your property, and to notify us of changes to the flood zone map that effect your property during the life of your loan.
Flood Insurance
A form of hazard insurance required by the federal government to cover property damage or loss in flood zones.
Floor
The minimum interest rate payable on an adjustable-rate mortgage.
Forbearance
Grace period given when a lender postpones foreclosure to give the borrower time to catch up on overdue payments.
Foreclosure (or Repossession)
Legal process by which the lender forces the sale of a property when the borrower has not met the mortgage terms.
Freddie Mac
The nickname for the Federal Home Loan Mortgage Corporation; it operates similarly to Fannie Mae.
Freddie Mac (FHLMC)
Quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers.
Future Value of Money
The future value of money is the value that your money will have after it has compounded at some interest rate for a period of time. If you put $100 in the bank now at 3% interest rate compounded annually, its future value is $103. Conversely, the present value of the $103 that you will have in one year is presently $100 if it compounds annually at 3% interest. Future and present values are essential when comparing values of money now and its worth in the future. For example, you may have a lottery in your state. You might know that the next prize amount is worth $1,000,000. What is not said many times is that this is $1,000,000 future value. That is, you will likely not receive $1,000,000 cash (less income tax, of course) if you were to be the sole winner. Instead you will probably receive a considerably reduced sum of money, that if invested at prevailing rates, will be worth $1,000,000 in 20 years. Let us say the prevailing rate is 5% compounded annually. If you receive $376,500 and deposit into this account you will have $998,966 after 20 years. So the future value of $376,000 is nearly $1M! Conversely, the present value of $1,000,000 twenty years from now is $376,000 now.