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E-3-02, Acronyms and Glossary of Defined Terms: B (02/07/2024)

balances-to-limits ratio

The relationship between the outstanding balance(s) on an individual’s revolving debt(s) to the total credit limit allowed for the revolving debt(s).

balloon mortgage

A mortgage that has level monthly payments that would fully amortize it over a stated term, but which provides for a lump-sum payment to be due at the end of an earlier specified term.

balloon payment

The outstanding balance due on a balloon mortgage that must be paid in a lump sum at the end of the mortgage term.


A legal proceeding in federal court in which a debtor seeks to restructure their obligations to creditors pursuant to the Bankruptcy Code. This generally affects the borrower’s personal liability for a mortgage debt, but not the lien securing the mortgage.

basis points (bps)

One one-hundredth of one percent. For example, 7½ basis points equal 0.075 percent or 0.00075.

blanket mortgage

A mortgage that is secured by a co-op project, as opposed to the share loans on individual units within the project.

book-entry delivery

An electronic system that allows for the issuance, maintenance, and transfer of mortgage-backed securities on the records of the U.S. Federal Reserve Banks. The system may be accessed through financial institutions that have book-entry accounts at one of the Federal Reserve Banks. Book-entry for Fannie Mae’s securities is available through all of the Federal Reserve Banks.

book-entry delivery date

The actual date that Fannie Mae issues mortgage-backed securities to the designated book-entry account for a financial institution that has such an account with one of the Federal Reserve Banks. The book-entry delivery date and the settlement date for the securities may be the same day.


The person to whom credit is extended. On a mortgage loan, the person who has an ownership interest in the security property, signs the security instrument, and signs the mortgage/deed of trust note (if their credit is used for qualifying purposes). See also co-borrower.


broker price opinion


basis points

bridge (or swing) loan

A short-term loan secured by the borrower’s principal residence (which is usually for sale) that allows the proceeds to be used for closing on a new house before the present home is sold.

broker origination

A loan that is originated under circumstances where a person or firm other than a mortgage loan seller (or its parent company, controlled affiliate, or subsidiary) or lender correspondent is acting as a “broker” and receives a commission for bringing together a borrower and a lender. The broker performs some of the loan processing functions (such as taking loan applications; ordering credit reports and title reports; requesting appraisals; and verifying a borrower’s income and employment), but does not underwrite the loan, fund the loan at settlement, or service the loan. Typically, the loan is closed in the name of the mortgage loan seller or lender correspondent that commissioned the broker’s services, but may also include so-called “table-funded” loans where the loan is closed in the broker’s name, but is funded by the mortgage loan seller or the lender correspondent.

broker price opinion (BPO)

A written estimate of the probable sales price of a property performed by a real estate agent or sales person with or without an interior property inspection. Commonly used for quality control and loss mitigation.

business day

A day other than (1) a Saturday or Sunday, (2) a day on which the Federal Reserve Bank of New York (or other agent acting as Fannie Mae’s fiscal agent) is authorized or obligated by law or executive order to remain closed, or (3) a day on which the main offices of Fannie Mae in the District of Columbia are scheduled to be closed. In this Guide, the word “day” without the modifier “business” refers to a calendar day.

buydown account

An account in which funds are held so that they can be applied as part of the mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.