Glossary

Foreclosure: A legal action that ends

Mac loan limit for a single-family home

is $417,000 and is higher in Alaska,

all ownership rights in a home when the

Guam, Hawaii, and the U.S. Virgin

homebuyer fails to make the mortgage

Islands. The Fannie Mae loan limit is

payments or is otherwise in default un-

$533,850 for a two-unit home; $645,300

der the terms of the mortgage.

for a three-unit home; and $801,950 for

Forfeiture: The loss of money, property,

a four-unit home. Also referred to as the

"conventional loan limit."

rights, or privileges due to a breach of a

legal obligation.

Federal Housing Administration

(FHA): An agency within the U.S. De-

Fully Amortized Mortgage: A mortgage

partment of Housing and Urban Devel-

in which the monthly payments are de-

opment (HUD) that insures mortgages

signed to retire the obligation at the end

and loans made by private lenders.

of the mortgage term.

FHA-Insured Loan: A loan that is in-

G

sured by the Federal Housing Adminis-

tration (FHA) of the U.S. Department of

Housing and Urban Development (HUD).

General Contractor: A person who

oversees a home improvement or con-

First Mortgage: A mortgage that is the

struction project and handles various

primary lien against a property.

aspects such as scheduling workers and

ordering supplies.

First-Time Home Buyer: A person with

no ownership interest in a principal

Gift Letter: A letter that a family mem-

residence during the three-year period

ber writes verifying that s/he has given

preceding the purchase of the security

you a certain amount of money as a gift

property.

and that you don't have to repay it. You

can use this money towards a portion

Fixed-Period Adjustable-Rate Mort-

of your down payment with some mort-

gage: An adjustable-rate mortgage (ARM)

gages.

that offers a fixed rate for an initial

period, typically three to ten years, and

Good-Faith Estimate: A form required

then adjusts every six months, annually,

by the Real Estate Settlement Proce-

or at another specified period, for the

dures Act (RESPA) that discloses an esti-

remainder of the term. Also known as a

mate of the amount or range of charges,

"hybrid loan."

for specific settlement services the bor-

rower is likely to incur in connection

Fixed-Rate Mortgage: A mortgage with

with the mortgage transaction.

an interest rate that does not change

during the entire term of the loan.

Government Mortgage: A mortgage

loan that is insured or guaranteed by a

Flood Certification Fee: A fee charged

federal government entity such as the

by independent mapping firms to identi-

Federal Housing Administration (FHA),

fy properties located in areas designated

the U.S. Department of Veterans

as flood zones.

Affairs (VA), or the Rural Housing

Service (RHS).

Flood Insurance: Insurance that com-

pensates for physical property damage

Government National Mortgage

resulting from flooding. It is required for

Association (Ginnie Mae): A govern-

properties located in federally designated

ment-owned corporation within the U.S.

flood hazard zones.

Department of Housing and Urban De-