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E-3-19, Acronyms and Glossary of Defined Terms: S (02/07/2024)

sales comparison approach to value (or market data approach)

A method of measuring the value of a property based on an analysis of comparable sales, contract offerings, and listings of properties that are the most comparable to the property that is being appraised.

sales contract

A contract for the purchase/sale, exchange, or other conveyance of real estate between parties. The contract must be in writing, contain the full names of the buyer(s) and seller(s), identify the property address or legal description, identify the sales price, and include signatures by the parties. Sales contracts are also known as agreements of sale, purchase agreements, or contracts for sale.

same month pooling

An option for creating MBS pools that allows a lender to include in a pool mortgages that close in the same month that the related MBS is issued (which means that they will have their first payment due two months after the MBS issue date).

scheduled/actual remittance type

A method of sending mortgage payments to Fannie Mae requiring lenders to remit the scheduled interest due (whether or not it is collected from borrowers) and the actual principal payments collected from borrowers.

scheduled/scheduled remittance type

A method of sending mortgage payments to Fannie Mae requiring lenders to remit the scheduled interest due and the scheduled principal due (whether or not payments are collected from borrowers).

second mortgage (or subordinate lien mortgage loan)

A mortgage loan that has a lien position subordinate to the first mortgage. Also called subordinate lien mortgage loan.

secondary mortgage market

The financial market in which residential mortgages and mortgage-related securities are bought and sold.

security balance

The balance for an MBS mortgage (or a participation interest in an MBS mortgage) that is determined by reducing Fannie Mae’s share of the issue date principal balance of the mortgage by its share of any principal distribution amounts included in subsequent monthly remittances; the balance for an MBS pool that represents the aggregate security balance of all the mortgages (or participation interests) in the pool as of any date, which is equal to the aggregate issue date principal balances of the mortgages (or participation interests) less any subsequent principal distribution amounts.


A Fannie Mae approved servicer that is contractually obligated to service one or more mortgage loans for Fannie Mae. Also refers to a subservicer if there is a subservicing arrangement.

servicing compensation

The income that a servicer receives for the collection of payments and management of operational procedures related to a mortgage. It includes a base servicing fee, plus late charges, fees charged for special services, yield differential adjustments or excess yield, and, sometimes, prepayment premiums.

servicing fee

The monthly fee, generally expressed in basis points, that a lender retains from borrowers’ interest payments as compensation for servicing loans on an investor’s behalf.

Servicing Marketplace

The Servicing Marketplace is a committing platform that provides a standardized process for sellers and servicers who engage in concurrent servicing transfer transactions.

servicing spread

The fixed percentage amount for each mortgage or participation interest in a weighted-average ARM MBS pool that consists of the guaranty fee and the servicing fee. It cannot be less than the sum of the minimum allowable servicing fee and the guaranty fee applicable to the pool, nor greater than the sum of the maximum allowable servicing fee and the guaranty fee.

settlement date

The date that the sale of an MBS is settled and funds are paid or transferred. It may be the same day that the securities are issued to the designated book-entry account.

settlement statement

A form required by federal law that provides disclosures to borrower(s) of the final loan terms and costs of the mortgage loan transaction. References to “settlement statement” include the HUD-1 Settlement Statement and Closing Disclosure forms, as applicable, based on the application date of the mortgage loan.


special feature code


Special Flood Hazard Area

shared appreciation

A program that creates affordability by providing down payment and/or closing cost assistance to the borrower in exchange for repayment of a loan and a share in any future appreciation of the property.

shared equity

A program, also referred to as a "below-market program," that supports long-term affordability by offering a subsidized sales price in exchange for restrictions on the future sale of the home, including limitations on both income eligibility and sales price. See also Income and Resale Price Restrictions.


Securities Industry and Financial Markets Association

significant defect

One or more defects that either necessitate a change to the price on which the loan was acquired or result in the loan being unacceptable for purchase had the true and accurate information about the loan been known at time of purchase. In determining whether there is a significant defect, Fannie Mae must give due consideration to the severity of the defect. The defect must also meet certain criteria established in this Guide.

significant interest rate buydown

A temporary reduction in the initial interest rate of a mortgage loan that provides for either more than a 2% difference between the actual interest rate as stated in the note and the “bought-down” interest rate, or a buydown period greater than two years. Fannie Mae restricts the percentage of an MBS pool that can be comprised of mortgages with this type of buydown. Requires SFC 014 at delivery.

single entity owner

The same individual, investor group (e.g., developer, sponsor, builder), partnership, or corporation that owns multiple units in a condo or co-op project. In its examination for project eligibility, the lender must determine compliance with Fannie Mae’s single entity ownership requirements.

single pool

An MBS pool that consists of mortgages or participation interests delivered by a single lender.

single-family mortgage loan

A mortgage loan secured by a property that contains one to four residential dwelling units.

single-width manufactured home

A single section manufactured home constructed in the factory and shipped intact to the site. The home is permanently affixed to the land and is legally classified as real property.


stripped mortgage-backed security


Secured Overnight Financing Rate

special assessment districts (or municipal utility districts)

Jurisdictions that have been granted the authority to assess owners of properties within their boundaries for funds that will be used to cover the operating costs and debt service they incur for providing water or other utilities for the area (since it is not served by existing city or municipal utility services).

special deposit account

An account that is established for renovation mortgages to hold the funds needed for the renovation work so they can be disbursed from time to time as particular portions of the work are completed.

special feature codes (SFC)

Codes that Fannie Mae uses to identify certain characteristics related to individual mortgage loans, mortgage products, or negotiated transactions. A lender must specify these codes when they apply to mortgages delivered to Fannie Mae.

Special Flood Hazard Area (SFHA)

The land in the flood plain within a community having at least a 1% chance of flooding in any given year, as designated by FEMA.

special lender obligations

Special requirements or undertakings that a lender agrees to honor in connection with the purchase or securitization of mortgages—such as credit support obligations; repurchase obligations; and recourse, loss-sharing, or indemnity obligations.

special requirement

A negotiated agreement for the delivery of certain special mortgage loan products or other mortgage loans that were originated with terms that are at variance with standard Fannie Mae pricing and operational requirements.

special servicing option

A guaranty fee option for an MBS pool under which Fannie Mae assumes the entire risk of loss from a borrower default; a servicing option for RD-guaranteed mortgages under which Fannie Mae will bear all losses not recovered from the RD. (See recourse for the equivalent term for a whole loan delivery.)


Social Security Administration

standard pricing option

A pricing method under which all mortgages delivered under a single commitment will be priced based on the relationship of their specific pass-through rate to the commitment’s single required yield. Standard pricing can result in either a par price or a discount price, but not a premium price.

standard remittance cycle

A payment cycle used for scheduled/scheduled remittance types for MBS pools that requires the scheduled and unscheduled payments to be remitted to Fannie Mae on the 18th calendar day of each month (or on the preceding business day if the 18th is not a business day).


Any state, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.

stated-structure pooling

A method of creating an ARM MBS pool that results in interest accruals to the security holder at the stated pool accrual rate.

structured transactions

Multi-class or multi-tranche Fannie Mae securities and/or single-class Fannie Mae MBS that are resecuritizations of other single-class Fannie Mae MBS.


A housing development that is created by dividing a tract of land into individual lots for sale or lease.

subordinate financing

Any mortgage or other lien that has priority lower than that of the first mortgage.

subordinate lien mortgage loan

See second mortgage.


A Fannie Mae approved servicer that is contractually obligated to a master servicer to perform substantially all of the ongoing servicing activities for one or more mortgage loans for the master servicer.

subservicing arrangement

An arrangement wherein the master servicer of one or more Fannie Mae mortgage loans hires a subservicer to subservice substantially all of its subservicing functions.


A subsidiary of a specified entity is controlled by such entity, directly or indirectly through one or more intermediaries. 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.

swing loan

See bridge loan.