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E-3-06, Acronyms and Glossary of Defined Terms: F (05/01/2024)

facsimile signatures

A form of signature that is electronically reproduced or copied in another acceptable manner. Such signatures are acceptable under certain conditions as long as they are valid and enforceable in the jurisdictions in which they are used.

factory-built housing

Prefabricated single-family housing (such as panelized, modular, or sectional housing), which is constructed in a factory (and, if applicable, in accordance with the building codes of the state in which the factory is located) and is subsequently joined together at a permanent building site, assumes the characteristics of site-built housing (such as permanent connections to water, electrical, and waste disposal systems), and is legally classified as real property. (Collectively, this term also may refer to HUD code manufactured homes. See the definition of that term for distinctions between the different types of factory-built housing.)

Fair Access to Insurance Requirements (FAIR) plan

A state-run or state-sponsored insurance plan that provides property insurance to property owners who cannot obtain it in the voluntary insurance market.

FAIR plan

See Fair Access to Insurance Requirements (FAIR) plan.

Fannie Mae

Federal National Mortgage Association.

Fannie Mae Connect

A Web-based application that allows lenders to access, view, and download reports on pools and whole loans submitted to Fannie Mae through Loan Delivery.

Fannie Mae losses

Losses, damages, penalties, settlements, liabilities, judgments, claims, counterclaims, defenses, actions, costs, expenses, attorneys' fees, and other legal fees (collectively, “Fannie Mae losses” or “losses incurred by Fannie Mae”).

Fannie Majors

See multiple pool.

Federal Emergency Management Agency (FEMA)

A federal agency that provides assistance in areas that have suffered a major disaster or other emergency. It also maintains flood insurance rate maps that identify the Special Flood Hazard Areas in which Fannie Mae requires flood insurance.

Federal Emergency Management Agency (FEMA) disaster area

A city, county, or parish designated by FEMA as eligible for individual assistance as a result of a natural disaster.

Federal Housing Administration (FHA)

FHA, also a part of HUD, provides mortgage insurance on loans made by FHA-approved lenders.

Federal Housing Finance Agency (FHFA)

The safety, soundness, and mission regulator for Fannie Mae. FHFA replaced the former regulator, the Office of Federal Housing Enterprise Oversight (OFHEO).

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 condo project, the unit owner is the exclusive owner only of the air space within their portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.


Federal Emergency Management Agency


Federal Housing Administration

FHA-insured mortgage

A mortgage by the FHA; may be referred to as a "government" mortgage.


Federal Housing Finance Agency


Federal Home Loan Mortgage Corporation

fidelity bond

See fidelity/crime insurance.

fidelity/crime insurance

Insurance which protects a business or organization against economic loss as a result of fraudulent and dishonest acts committed against them.

final project approval

The eligibility determination that is issued for a condo, PUD, or co-op project to indicate that the project's physical characteristics and marketability are acceptable to Fannie Mae, and that mortgages or share loans on units within the project may be delivered to Fannie Mae for purchase or securitization.

financed mortgage insurance premium

A mortgage insurance premium for which the borrower is not required to make an advance payment from their own funds. Rather, the amount required to pay for a lump-sum premium is financed by including it as part of the original mortgage amount.

Financial Institutions Reform, Recovery, and Enforcement Act

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 modified federal laws governing thrift and bank regulation. Title XI of the Act includes real estate appraisal reform amendments.

first mortgage

A mortgage that is the primary lien against a property.

first-generation homebuyer loan

A first-generation homebuyer loan is one in which each borrower meets the following requirements: (1) is purchasing the subject property; (2) will reside in the subject property as a principal residence; (3) has had no ownership interest (sole or joint) in another property during the last three years preceding the note date of the loan; and (4) one of the following must also apply: (a) no parent of the borrower has had an ownership interest (sole or joint) in a property in the last three years preceding the note date of the loan; (b) the borrower has aged out of foster care, or (c) the borrower has become emancipated.

first-time homebuyer

An individual is to be considered a first-time homebuyer who (1) is purchasing the security property; (2) will reside in the security property as a principal residence; and (3) had no ownership interest (sole or joint) in a residential property during the three-year period preceding the date of the purchase of the security property. In addition, an individual who is a displaced homemaker or single parent also will be considered a first-time homebuyer if they had no ownership interest in a principal residence (other than a joint ownership interest with a spouse) during the preceding three-year time period.

fiscal year

Any 12-month period used for financial reporting and preparation of balance sheets, profit and loss statements, and other financial summaries.

fixed installment

That portion of a mortgage payment that is applied toward principal and interest. When a mortgage negatively amortizes, the fixed installment does not include any amount for principal reduction.

fixed-rate mortgage

A mortgage that provides for only one interest rate for the entire term of the mortgage. Fannie Mae acquires fixed-rate mortgage loans that are fully amortizing.

flood insurance

Insurance which protects the insured against loss or damage to their property resulting from flooding.

Flood Insurance Rate Map (FIRM)

The official map of a community on which FEMA has delineated both the special hazard areas and the risk premium zones applicable to the community.


Willingness to refrain, in full or in part, from pursuing remedies against a delinquent borrower for a period of time (specified or unspecified), but without modification of the loan terms. See also modification .


The legal process by which a borrower in default under a mortgage is deprived of their 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.

Freddie Mac

Federal Home Loan Mortgage Corporation (FHLMC). A congressionally chartered corporation that purchases mortgage loans in the secondary mortgage market.


fixed-rate mortgage

full payment amount

The monthly payment required, at each interest change date, to amortize the then outstanding principal balance of an ARM at the new interest rate over the remaining mortgage term.

fully amortizing ARM

An adjustable-rate mortgage that has a monthly payment sufficient to amortize the unpaid principal balance-at the interest accrual rate-over the mortgage term.

functional depreciation (obsolescence)

A loss in value that is caused by defects in the design of a structure or by changes in market preferences that result in some aspect of a property being considered obsolete by current standards.