FHA Mortgage
A loan insured by the Department of Housing and Urban Development of the Federal Housing Administration (FHA).

FNMA
See Federal National Mortgage Association.

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
A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds. Also known as Federal National Mortgage Association (FNMA).

Fannie Mae's Community Home Buyer's Program
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.

Federal Home Loan Mortgage Corporation (FHLMC)
Commonly known as 'Freddie Mac.' A major secondary market investor, government sponsored, but privately owned corporation, which is a major purchaser of mortgages.

Federal Housing Administration (FHA)
A division of the Department of Housing and Urban Development (HUD). FHA insures loans made by approved lenders in accordance with their HUD regulations. Washington Mutual is an approved lender.

Federal National Mortgage Association (FNMA)
Commonly known as 'Fannie Mae.' A government sponsored but privately owned corporation whose primary function is to buy and sell conventional FHA and VA mortgages in the secondary market.

Fee Simple
The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to one's heirs.

Finance Charge
The charges that include all of the interest expected to be earned over the life of a loan, in addition to the service charges, mortgage insurance premiums and certain other charges related to a loan.

First Adjustment
When you can expect the first rate adjustment in your adjustable-rate mortgage (ARM) loan.

First Mortgage
A mortgage that is the primary lien against a property.

Fixed Amortization
The payment of a debt in regular, periodic installments of principal and interest. Fixed amortization occurs when the interest rate and payment never change. The same payment is made over the life of the loan. Each month, as the principal is paid down and, since interest is charged against the remaining amount of principal, the amount charged for interest decreases.

Fixed Rate Mortgage (FRM)
A mortgage loan with a constant interest rate and payment throughout the life of the loan. The interest rate and payment amount are established at the time of funding.

Flex 3 Option ARM
An adjustable rate mortgage loan with four payment options: minimum payment, interest only, full principal and interest (30-year term) and full principal and interest (15-year term). These loans have an initial fixed interest rate for 3 years. After this period, the rate charged on the loan adjusts monthly, and payment option amounts adjust annually. Deferred interest, or negative amortization, is possible with these loans.

Flex 5 Option ARM
An adjustable rate mortgage loan with four payment options: minimum payment, interest only, full principal and interest (30-year term) and full principal and interest (15-year term). These loans have an initial fixed interest rate for 5 years. After this period, the rate charged on the loan adjusts monthly, and payment option amounts adjust annually. Deferred interest, or negative amortization, is possible with these loans.

Float Down
A float-down option allows the consumer to lock in the interest rate and points on a loan, yet retain the right to lower that locked-in interest rate prior to closing if interest rates offered by the lender for similar loans decreases. Details of the float-down option (if applicable) are in the Loan Terms Agreement that you will receive if you submit a loan application.

Floater
Insurance protecting against the loss of movable property, jewelry or furs for example, regardless of its location. The coverage "floats" with the property. Also known as Valuable Article insurance.

Floating Interest Rate
Interest rate and points that are subject to change before the loan closes or before the borrower decides to lock in the interest rate and points. The interest rate and points may change if the lender's interest rate and points for similar loans change. If the interest rate increases before the loan closes or before the borrower decides to lock in the interest rate and points, the principal amount the lender is willing to lend may decrease.

Flood Insurance
A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. Usually sold in connection with a government Flood Insurance plan. It is required for properties located in federally designated flood areas.

Foreclosure
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.

Foster Care Income
Income for providing foster parent services to foster children, that is paid by a government agency.

Freddie Mac
A major secondary market investor, government sponsored, but privately owned corporation, which is a major purchaser of mortgages. Also known as 'Federal Home Loan Mortgage Corporation' (FHLMC).

Full-time Salary
Regular income earned by being a permanent, full time employee of a company, generally working at least 35 hours every week.

Fully Indexed Interest Rate
This interest rate is the sum of the current index rate on an adjustable-rate mortgage (ARM) plus the margin.