Dictionary of Terms - F

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F

Facilitator: See nonagent.
Fair Credit Reporting Act: Federal law designed to regulate procedures and prevent old or inaccurate information from staying in consumer credit files. This act provides individuals the right to inspect their own credit files, although the credit bureau may charge a fee.
Fair Housing Act: Federal law making it illegal to refuse to rent or sell to anyone based on race, color, religion, sex, national origin, family status or disability.
Fair Housing Laws: Federal, state and local laws, particularly Title VIII of the 1968 Civil Rights Act, Title VI of the Civil Rights Act of 1964, and the Civil Rights Act of 1866, which forbid discrimination because of race, sex, color, religion or national origin in the selling or renting of homes or apartments and in other specified transactions. The act was amended in 1988 to include handicapped persons, persons with children under 18 and to extend coverage to appraisals.
Fannie Mae: The official name of the Federal National Mortgage Association - it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Farm Credit System: A federal agency of the Department of Agricultural that offers programs to help families purchase or operate family farms.
Farm Products: Crops produced by an agricultural enterprise and are planted in the ground. Livestock and poultry are not considered farm products for taxation purposes only.
Farmer Mac: An agency that operates similarly to Fannie Mae and Freddie Mac but for agricultural loans. Farmer's Home Administration (FmHA)
Farmer's Home Administration (FMHA): A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.
Feasibility Analysis: A study of the cost-benefit relationship of an economic endeavor. (USPAP)
Feasibility Study: An analysis of a proposed subject or property with emphasis on the attainable income, probable expenses and most advantageous use and design. The purpose of such a study is to ascertain the probable success or failure of the project under consideration.
Federal Deposit Insurance Corporation (FDIC): An independent federal agency that insures the deposits in commercial banks.
Federal Home Loan Mortgage Corporation (FHLMC): The Federal Home Loan Mortgage Corporation is commonly known as Freddie Mac. This corporation buys mortgages from lending institutions, pools them with other loans and sells shares to investors.
Federal Home Loan Mortgage Corporation: (FHLMC or Freddie Mac) - An agency directed by the Federal Home Loan Bank Board for the purpose of increasing the availability of mortgage funds and providing greater flexibility for mortgage investors. It purchases single-family and condominium mortgages from approved financial institutions and resells its mortgage inventories.
Federal Housing Administration (FHA): A federal agency that is now a division of the Department of Housing and Urban Development. One of its major activities is insuring residential mortgage loans.
Federal National Mortgage Association (FNMA) Also Know As "Fannie Mae": A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA.
Federal National Mortgage Association (FNMA): (FNMA or Fannie Mae) - An independent agency that purchases mortgages from the primary markets and issues long- term debentures and short-term discount notes.
Federal Reserve Bank System: Central bank of the United States established to regulate the flow of money and the cost of borrowing.
Federal Reserve System: The country's central banking system which is responsible for the nation's monetary policy by regulating the supply of money and interest rates.
Fee Simple: Fee simple title to real estate is the greatest possible degree of ownership; free and clear of all encumbrances, easements, rights-of-way, liens, leases or mortgages.
Fee Simple Absolute: The maximum possible estate or right of ownership of real property continuing forever.
Fee Simple Defeasible: See defeasible fee estate.
Fee Simple Defeasible: Any limitation on property use that could result in loss of the right of ownership.
Fee Simple Determinable: A fee simple estate qualified by a special limitation. Language used to describe limitation includes the words "so long as" or "while" or "during."
Fee Simple Estate: The most complete form of ownership of real property; absolute ownership.
Fee Simple Qualified: Ownership of property that is limited in some way.
Fee Simple: The highest interest in real estate recognized by the law; the holder is entitled to all rights to the property.
Fee-for-service: Arrangement where a consumer asks a licensee to perform specific real estate services for a set fee.
Fenestration: The overall manner or plan of placing doors or windows in a structure.
Feudal System: A system of ownership usually associated with precolonial England in which the king or other sovereign is the source of all rights. The right to possess real property was granted by the sovereign to an individual as a life estate only. Upon the death of the individual title passed back to the sovereign not to the decedent's heirs.
FHA Loans: Mortgages that are insured by the Federal Housing Administration (FHA). The FHA operates loan plans for investors and purchasers of rural property, and provides low-rate mortgages to buyers who make a down payment as small as 3 percent.
FHA Mortgage Insurance: Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan with the Federal Housing Administration (FHA). In addition to the one time fee, the FHA also requires an additional insurance fee of up to 0.5 percent of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid.
Fiduciary Relationship: A relationship of trust and confidence as between trustee and beneficiary attorney and client or principal and agent.
Fiduciary: One in whom trust and confidence is placed; a reference to a broker employed under the terms of a listing contract or buyer agency agreement.
FILA: The Federal Housing Administration. Insures loans made by approved lenders in accordance with its regulations.
Final Value Estimate: The appraiser's estimate of the defined value of the subject property, arrived at by reconciling (correlating) the estimates of values derived from the sales comparison, cost and income approaches.
Financial Institutions Reform Recovery And Enforcement Act Of 1989 (FIRREA): Federal legislation that mandates state licensing or certification for appraisers performing appraisals in certain federally related transactions.
Financing Statement: See Uniform Commercial Code.
Finished Area: An enclosed area in a house that is suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the house. (ANSI Z765-1996) The amount of footage in a dwelling as measured under the guidelines as set forth by the ANSI Z765-1996.
Fire Stop: Short boards the same size as the studs or joists placed between and perpendicular to the stud or joint. They slow the air flow in the wall and floor cavities during a fire.
Firm Commitment: A written promise made by a lender to loan money for the purchase of property.
First Mortgage: A mortgage that has priority as a lien over all other mortgages.
Fiscal Policy: The government's policy in regard to taxation and spending programs. The balance between these two areas determines the amount of money the government will withdraw from or feed into the economy, which can counter economic peaks and slumps.
Fixed Assets: Property usually consisting of land, buildings, machinery, equipment, tools, dies, autos, trucks, etc. permanently employed in the production of goods. These assets are to be distinguished from property becoming part of the product. Also termed property, plant and equipment.
Fixed Expenses: Those costs that are more or less permanent and do not vary in relation to the property's occupancy or income, such as real estate taxes and insurance for fire, theft and hazards.
Fixed Time: The specific weeks in a year that an owner of a timeshare arrangement has access to accommodations.
Fixed-rate Mortgage: A home loan with an interest rate that will remain at a specific rate for the term of the loan.
Fixture: Anything affixed to land, including personal property attached permanently to a building or to land so that it becomes part of the real estate.
Flashing: Sheet metal or other material used in roof and wall construction to finish the connecting points between roof and wall covering to prevent leakage.
Flood Certification: The process of determining whether a property is located within a known flood zone.
Flood Insurance: A special insurance policy that provides insurance protection for losses caused by flooding. It is usually written by the federal government through the National Flood Insurance Program.
Footing: Primary support for a structure with the lower edge being extended be-low the frost line for the region. Materials usually consist of steel and concrete. The foundation walls are placed on the footings.
For Sale By Owner (FSBO): A selling method whereas the owner of the property acts as the selling agent and handles the sales process directly with the buyer or buyer's agent. This is most commonly done y owners in order to avoid having to pay a listing commission.
Foreclosure: A court action initiated by a mortgagee or lienor for the purpose of having the court order that the debtor's real estate be sold to pay the mortgage or other lien (mechanic's lien or judgment).
Form Appraisal Report: Any of the relatively brief standard forms prepared by agencies such as the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association and others for routine property appraisals.
Foundation: Collectively the footing and walls, below or partly below grade, that provides support for exterior walls or other structural parts of a building.
Fractional Section: A parcel of land less than 160 acres usually found at the edge of a rectangular survey.
Fraud: Deception intended to cause a person to give up property or a lawful right.
Freddie Mac: A congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market. Freddie Mac is the common name for the Federal Home Loan Mortgage Corporation (FHLMC).
Freehold Estate: An estate in land in which ownership is for an indeterminate length of time in contrast to a leasehold estate.
Freehold: An estate in land in which ownership is for an indeterminate length of time.
Frequency Distribution: The arrangement of data into groups according to the frequency with which they appear in the data set.
Front Footage: The measurement of a parcel of land by the number of feet of street or road frontage.
Frontage: The part of a property's boundary that abuts/parallels the street or shoreline.
Front-end Ratio: A lender calculation that compares a borrower's monthly housing expense (principal, interest, taxes, and insurance) to gross monthly income.
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.
Functional Curable Obsolescence: Functional obsolescence that can be corrected at a lesser cost than the increase in utility resulting from the correction.
Functional Incurable Obsolescence: Functional obsolescence that results from structural deficiencies or super adequacies that the prudent owner or purchaser would not be justified in replacing, adding or removing, because the cost of effecting the cure would be greater than the anticipated increase in utility resulting from the replacement, addition or removal.
Functional Obsolescence: Impairment of functional capacity or efficiency. Reflecting the loss in value brought about by such factors as over-capacity, inadequacy, and changes in the art that affect the property item itself or its relation with other items comprising a larger property. The inability of a structure to perform adequately the function for which it is currently employed.
Functional Obsolescence-curable: Physical or design features that are no longer considered desirable by property buyers but could be replaced or redesigned at relatively low cost.
Functional Obsolescence-incurable: Currently undesirable physical or design features that are not easily remedied or economically justified.
Functional Utility: The sum of the attractiveness and usefulness of the property. It is the ability of the property to perform the function for which it is intended, in terms of current market tastes and standards.
Future Interest: A person's present right to an interest in real property that will not result in possession or enjoyment until some time in the future such as a reversion or right of reentry.





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