401(k)/403(b) -An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.

401(k)/403(b) loan -Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans — monies must be repaid to avoid serious penalty charges.

Facade – A building’s outside wall that faces the street.

Face Value – The dollar amount of a property’s value. It is indicated by numbers or words on a document.

Fair Credit Reporting Act – A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.

Fair Market Value – The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

Fannie Mae – Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation’s largest source of financing for home mortgages. Over the past 30 years, Fannie Mae has provided nearly $2.5 trillion of mortgage financing for over 30 million families.

Fannie Mae’s Community Home Buyer’s Program SM – An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family’s buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.

Fannie 97® -A financing option for a fixed-rate mortgage that offers home buyers a 3 percent down payment loan with either a 25- or 30-year term. The mortgage features a loan-to-value (LTV) percentage of 97 percent, and is designed to expand homeownership opportunities for people with modest incomes. Borrowers must take a pre-purchase home-buyer education session to qualify for a Fannie 97 mortgage.

Federal Fair Housing Law – a federal law that forbids renters or sellers from discriminating on the basis of race, color, sex, religion, or national origin.

Federal Housing Administration (FHA) -An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

Fee Agreement – An agreement between a borrower and a broker which normally specifies the relationship between them and the amount of compensation to the broker.

Fee Simple – absolute ownership of real property.

Fee Simple Estate – An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

FHA Coinsured Mortgage – A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the mortgagor’s default.

FHA Mortgage -A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

Fiduciary Responsibility – An obligation for a party to act in the best interest of another party. This kind of obligation usually exists when one person places special confidence and trust in another person.

Finder’s Fee – A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

Firm Commitment – A lender’s agreement to make a loan to a specific borrower on a specific property.

First Mortgage – The earliest mortgage on the property. This is determined only by the time of recording, not the size of the loan or mortgage type. When the first mortgage is paid off in full by the buyer, the second mortgage, if extant, becomes the first mortgage.

Fixed Installment -The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

Fixed Payment Mortgage – a loan featuring a periodic, consistent payment of interet and principal. It is secured by a real property or properties.

Fixed Rate Mortgage -Â A mortgage in which the interest rate does not change during the entire term of the loan .

Fixture – Personal property that becomes real property when attached in a permanent manner to real estate.

Flood Insurance – Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

Floodplain – A level land area that may occasionally face the threat of a flood from a nearby body of water.

Forbearance – In the event that a borrower becomes delinquent, a lender may pursue forbearance as a course of action to delay foreclosure.

Foreclosure -Â The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt .

Forfeiture – The loss of money, property, rights, or privileges due to a breach of legal obligation.

FRBO – for rent by owner.

Freddie Mac (FHMLC) – Federal National Mortgage Association, a federally chartered corporation that buys mortgages, then packages them to sell as securities to buyers.

FSBO – for sale by owner.

Fully Amortized Adjustable-Rate Mortgage – 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 .