Habendum Clause – “To have and to hold.” The clause in a deed that defines the quantity of the estate granted.

Hard Money Loan – A loan underwritten with the value and condition of the property as the most important criteria for approval. Other issues may include the borrower’s credit, the ability of the borrower to repay the loan, and/or the ability of the borrower to either manage the property or successfully sell the property, making any necessary repairs. In a hard money loan, issues such as owner occupancy, debt ratios, etc are usually not considered. Appraisals rather than purchase prices are used to determine value. Hard money loans often offer cash out purchases as a key benefit. These loans are usually approved within just a few days and funded very quickly as well—usually in less than two weeks. Disadvantages of this loan type include a relatively high interest rate (13-16%) and high points (usually 5 to 10). (See definition of “underwriting” below.)

Hazard Insurance – Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.

Hereditaments – property, personal and real, capable of being inherited.

Hiatus – A gap between two land parcels that the legal description does not include.

Highest and Best Use – the use of a parcel of land that is most likely to produce the greatest net return to the land or building over a given time period.

Holdover Tenant - a tenant who remains in possession of the leased property after the expiration of the lease term.

Home Equity Conversion Mortgage (HECM) – A special type of mortgage that enables older home owners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a reverse mortgage.

Home Equity Line of Credit – A mortgage loan, which is usually in a subordinate position, that allows the borrower to obtain multiple advances of the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower’s equity in a property.

Home Inspection - A thorough inspection that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser. Contrast with appraisal.

HomeKeeperSM – Fannie Mae’s adjustable-rate conventional reverse mortgage, which allows older homeowners to borrow against the value of their homes and receive the proceeds according to the payment option they select. The amount available is based on the number of borrowers and their ages and the adjusted property value. Anyone 62 years or older who either owns his or her own home free and clear or has very low mortgage debt is eligible.

Homeowners’ Association (HOA) – A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.

Homeowner’s Warranty (HOW) – A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by the builder or property seller as a condition of the sale.

Homeowner’s Insurance – An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents (see also Hazard Insurance).

Homeowner’s Warranty – A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.

Homestead – a status provided to a homeowner’s primary residence by certain state statutes to protect the home against judgments up to amounts specified in the statutes.

Homestead Exemption – A reduction in some jurisdictions in the assessed value that is allowed for a homeowner’s personal residence.

HomeStyle® Mortgage Loan - A mortgage that enables eligible borrowers to obtain financing to remodel, repair, and upgrade their existing homes or homes that they are purchasing. The financing takes the form of a conventional second mortgage or a Federal Housing Administration (FHA) Section 203(k) first mortgage.

Housing and Urban Development (HUD) – a federal government agency that implements certain federal housing and programs encouraging community development.

Housing Code – An ordinance created by local government that sets specific, minimum standards of safety and sanitation for existing residential buildings.

Housing Expense Ratio – The percentage of gross monthly income that goes toward paying housing expenses.

Hypothecate – The act of pledging something as security without being required to give up possession of it.

HUD median income – Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 statement – A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The blank form for the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the “closing statement” or “settlement sheet.”