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E-3-01, Acronyms and Glossary of Defined Terms: A (05/01/2024)

accrual rate

The rate at which interest is calculated. For a particular remittance date for an MBS pool, it is the mortgage interest rate due under the terms of the mortgage note during the period beginning on the second day of the month preceding the remittance date and ending on the first day of the month in which such remittance date occurs, less the lender’s servicing spread.


Automated Clearing House

actual/actual remittance type

A remittance type that requires the lender to remit to Fannie Mae only the actual interest due (if it is collected from borrowers) and the actual principal payments collected from borrowers.

adjustable-rate mortgage (ARM)

A mortgage loan that permits the lender to periodically adjust the interest rate on the basis of changes in a specified index.


accessory dwelling unit


An entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, a seller. For the purposes of this definition, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity through ownership, by contract, or otherwise.

affiliated projects

Condo, co-op, and PUD projects that are under the same master association or share the use of common facilities that are either owned individually or as part of a master association or development are considered affiliated projects. Condo, co-op, or PUD projects that do not meet this criteria, are not considered affiliated projects, even if they are managed by the same management company. 


Audited Financial Statement


An attachment to a legal document that is used to insert language or signatures when there is no space for them on the document itself. Frequently used to add endorsements to the mortgage note.


American Land Title Association


Features that enhance the project but are not essential to the project’s use. Examples include, but are not limited to, swimming pools, fitness centers, tennis courts, playgrounds, gardens, or beach access.

American Land Title Association (ALTA)

A national association of title insurance companies, abstractors, and title agents. The association speaks for the abstract and title insurance industry and establishes standard procedures and title policy forms.


area median incomes


Gradual reduction of the mortgage debt through periodic payments scheduled over the mortgage term.

amortization schedule

A timetable for payment of a mortgage that shows the amount of each payment that should be applied to interest and principal and the remaining unpaid principal balance after each payment is applied.


A responsible party may dispute in writing a demand issued by Fannie Mae. The “appeal process” includes both the first and second appeals available to the responsible party.

application date

The date on which receipt of the borrower’s financial information first triggers the federal Truth in Lending disclosure requirements to the borrower in connection with the mortgage loan.


A report that sets forth an opinion or estimate of value.

appraisal waiver

See value acceptance.


adjustable-rate mortgage

ARM Flex

ARM MBS pools that provide interest accruals at a weighted-average pool accrual rate (which is developed by using either a fixed MBS margin or a weighted-average MBS margin). Because the application of the interest rate caps for the mortgage and the pool will coincide, the pass-through rate for a mortgage will not increase on any change date in which the interest rate cap limits the interest rate that is charged to the borrower.

ARM Flex Plus

ARM MBS pools that provide interest accruals at a weighted-average pool accrual rate (which is developed by using a fixed MBS margin) and allow interest rate caps to be applied independently to the individual mortgages in the pool and to the pass-through rate for the pool. This means that the pass-through rate for a mortgage may continue to increase even when no further increases can be made to the borrower’s interest rate.

As Soon As Pooled (ASAP) Plus settlement

A settlement option in which a lender can deliver individual mortgages to Fannie Mae as much as 60 days before they are redelivered for whole loan purchase or allocated to a specific MBS pool.

As Soon As Pooled (ASAP) Sale settlement

An MBS settlement option in which a lender delivers pools of mortgages to Fannie Mae and receives a cash payment for them, with the securities from the delivered pools being used to satisfy a trade with either Fannie Mae or a third party.


As Soon As Pooled Plus


As Soon As Pooled Sale

assignment of rents

A written agreement wherein the owner of a property gives another party, such as the mortgagee or creditor, the right to collect rents, manage the property, pay expenses, and apply the net income toward delinquent mortgage payments.


A transaction in which the purchaser of real property takes over the seller’s existing mortgage; the seller remains liable for the mortgage unless released by the lender from this obligation. The terms describing whether or not the loan is assumable are typically set forth in the security instrument.


ability to repay

Automated Clearing House (ACH)

An electronic drafting system that debits (or credits) an authorized bank account and electronically transfers funds to (or from) another designated account.

automated valuation model (AVM)

AVMs are statistically based computer programs that use real estate information, such as comparable sales, property characteristics, tax assessments, and price trends, to provide an estimate of value for a specific property.


automated valuation model