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Abatement

Derived from Latin battere, "abatement" a common legal term meaning "the beating down, removal, or diminishment" of something. For example, lead abatement refers to finding and removing lead paint. Abatement usually refers to "Rent Abatement", the incentive offered by a landlord, including free rent, early occupancy, or reduction of fees.

Absorption Rate
The rate at which rentable space is filled, divided into gross absorption and net absorption. Gross absorption is a measure of the total square feet leased over a specified period, with no consideration given to space vacated in the same geographic area during the same time period. Net absorption is equal to the amount occupied at the end of a period, minus the amount occupied at the beginning of a period. Net absorption does take into consideration the space vacated during the period

Abstract of Title
Abstract of title is a historical summary of the recorded instruments and proceedings on the title of a property.

Adjustable Rate Mortgage or ARM
An ARM is a loan that has a varying interest rate and payment based on an adjustment period. The adjustment is dependent on the variation in a benchmark index, usually the LIBOR or prime rate. This loan is also known as a variable rate mortgage.

Adjusted Sales Price
Adjusted sales price is the price on the contract less all credit concessions by the seller.

Air Rights
Air rights are the legal ability to use or control the space above a property. Air rights can be sold, rented or leased to another party.

Amenities
Amenities are the enhancements that buildings offer its owners or tenants. These usually include a doorman, health club, garage, children's playroom, common lounge, etc.

Amortization
Amortization is the periodic payment of principal and interest on a liability (including a mortgage), or the write-off of a non-depreciable asset over a scheduled term.

Amortization Schedule
An amortization schedule is the designation of periodic payments of principal and interest toward the principal to eventually pay off a debt.

Annual Percentage Rate or APR
The APR is the actual effective rate of interest charged on a loan expressed on a yearly basis and represents the full cost of all elements associated with obtaining a full mortgage into a single formula. The APR is a useful device for making comparisons between mortgage products.

Appraisal
An appraisal is the evaluation of a property by a licensed appraiser on its price based on previous sales of similar properties. The appraised value is used by a bank to determine the lending limit on a given property. A seller may also have a property appraised to determine the offering price during a sale.

Assessment
An assessment is a levy against property and can be an extraordinary payment called for by the board of directors of a cooperative or condominium for the purpose of making a capital improvement or to provide some other essential service for which funds in the reserve account are inadequate.

Asset
An asset is something that is owned that has value.

Assignment
Assignment is the process by which a right or contract is transferred from one party to another. Examples of typical assigned contracts are mortgages, leases and deeds of trust.

Attorney-in-Fact
An attorney-in-fact is a person appointed to perform legal acts for another under a power-of-attorney.

Balloon Mortgage
A balloon mortgage is a short-term mortgage with fixed installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at the end of the term.

Board Approval
Board approval is a condition in the standard cooperative sales contract requiring that the buyer obtain approval from the board of directors of the cooperative corporation as a prerequisite to completing the sale.

Bridge Loan
A bridge loan is a loan for a short duration of time and can be used when one is purchasing one property but is dependent on the equity from another property that has not yet been sold. Once the property is sold then the bridge loan is repaid.

Broker (See Real Estate Broker)

Brownstone
A brownstone is a townhouse that is usually a 3 to 5 story building, named for traditional "brown stone" used in the fa├žade. It may be a single family building or have been converted into multiple apartments. The original structure was built in the 19th or early 20th centuries.

Building Restrictions
Building restrictions are the requirements in building codes that affect the size and appearance of the building.

Buy Down
Buy down is the voluntary paying of discount points by a borrower to reduce mortgage interest rate at the time the loan is made.

Buyer's Broker
A buyer's broker is a broker who represents the buyer in effectuating a purchase. Normally in residential real estate transactions, the buyer's broker shares the commission received by the listing broker, who represents the seller.

By-Laws
By-laws are the rules by which the cooperative corporation or condominium operates, including those regulating elections, officers, and authorizations.

Capital Expenditure
A capital expenditure is an improvement that will have a life of one year or more and will increase the value of the property.

Capital Gain
Capital gain is the seller's gain on an asset used in a trade or business or for investment, including real estate. This gain is taxed at varying rates depending on whether the asset was held for more or less than one year.

Capital Improvement
Capital improvement is an item that adds value to the property, adapts the property to new uses, or prolongs the life of property. Maintenance is not a capital improvement.

Capitalization Rate
The percentage of the investment the investor will receive back each year from the net income from the property.

Caps
Caps are percentage restrictions on an ARM which limit the amount the interest rate may change per year and over the life of the loan.

Carry-Cost Rule
The carry-cost rule is used by banks to evaluate borrowers for loans. It gives the maximum percentage of a borrower's income that the bank will find acceptable to carry the loan and related housing costs. This rule is used in conjunction with the debt/equity ratio.

Cash Flow
Cash flow is the income produced by an investment property after deducting operating expenses and debt.

Cash Reserve
In a mortgage commitment, some lenders require that the borrower have on deposit in their bank accounts at the time of the closing an amount equal to a predetermined number of months of the cost of principal, interest, taxes, and insurance, which is referred to as a cash reserve.

Caveat
Caveat is a warning or caution that may be an amendment to a contract of sale.

Caveat Emptor
Caveat emptor in Latin means "let the buyer beware", which applies in most real estate transactions.

Certificate of Occupancy (C of O)
The Certificate of Occupancy is a certificate issued by a local governmental entity responsible for the use of land in the community where the property is located stating that the structures on the property or any improvements made to these structures comply with the codes, ordinances and regulations of that governmental entity and that they may be occupied.

Certificate of Title Opinion
Certificate of Title Opinion is a report based on a title examination, which states the examiner's opinion of the quality of a title to real property.

Cession Deed
A cession deed is used to relinquish real property to a municipality for a road or other public work project.

Chain
A chain in land measurement is a distance of 66 feet.

Chain of Title
Chain of Title is a successive conveyance of title to a specific parcel of land.

Chattel
Chattel is personal property.

Civil Rights Act of 1866
The Civil Rights Act of 1866 is a federal law that prohibits all discrimination on the basis of race.

Civil Rights Act of 1964
The Civil Rights Act of 1964 is a federal law that prohibits discrimination in many instances, but in Title VI it prohibits discrimination on the ground of race, color, or national origin under any program or activity receiving federal financial assistance.

Civil Rights Act of 1968 (See Fair Housing Act of 1968)

Closing
The closing is when the transfer of ownership of a property from the seller to the buyer occurs according to the sales contract.

Closing Costs
Closing costs are the expenses incurred in the purchase and sale of real property paid at the time of settlement or closing. Some examples of closing costs are title insurance, attorney fees, appraisal fees, recording fees and taxes.

Closing Statement
A closing statement is an accounting of the funds received and distributed in a real estate transaction.

Cluster Zoning
Cluster zoning is a form of zoning that provides for several different types of land use within a zoned area.

Coastal Zone Management Program
The Coastal Zone Management program is a program coordinated by DOS to preserve and protect New York's coastline.

Co-Broke
Co-broke is an arrangement between two brokerage firms to share a commission. Normally used when one broker is the seller's exclusive listing agent and the other broker represents the buyer.

Code of Ethics
The Code of Ethics is a standard of conduct required by license laws and by the National Association of Realtors.

Codicil
A codicil is a supplement or an appendix to a will either adding or changing a bequest.

Collateral
Collateral is the security put up in exchange for a loan, which can be taken by the bank if the loan goes unpaid. In the case of a mortgage loan, the collateral is the property.

Combination
Refers to when an owner combines two adjoining apartments into one to enhance the value and the space.

Commercial Zones
Commercial zones allow usage for retail stores, restaurants, hotels and service businesses.

Commingling
Commingling is the mixing of money or property of others with personal or business funds or other property.

Commission
The commission is the payment to the broker for his or her efforts on marketing and selling the property, and is usually a percentage of the total purchase price.

Commission Split
A commission split is the sharing of commissions between the listing agent and the broker of the buyer.

Commitment Fee
The commitment fee is a fee paid to the lender for processing, underwriting and originating the mortgage. It is also known as an origination fee.

Commitment Letter
A letter issued by the lender to the applicant that states funds will be provided subject to written terms and conditions.

Common Area or Common Elements
The common area is the area in the property or in the building that is available for use by all owners and tenants.

Common Charge
The monthly charge levied by a condominium to cover the cost of maintaining the common areas and services.

Common Law
Common law is the law set by judicial precedent or tradition as contrasted with a written statute.

Common Law Dedication
Common law dedication is an act by an owner allowing the public use of a property.

Community Planning
Community planning is a master plan for the orderly growth of a city or country to result in the greatest social and economic benefits to the people.

Comparables (Comps) or Comparative Market Analysis
Comps are used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities.

Compensatory Damage
Compensatory damage is the amount of money actually lost, which will be awarded by a court in case of a breached contract.

Competent Parties
Competent parties are persons or organizations legally qualified to manage their own affairs, including entering into contracts.

Complete Performance
Complete performance is the execution of a contract by virtue of all parties having fully performed all terms.

Condemnation
Condemnation is the exercise of the power of eminent domain or taking private property for public use.

Condemnation Value
Condemnation Value is the market value of condemned property.

Condition
A condition in a contract is any fact or event which, if it occurs or fails to occur, automatically creates or extinguishes a legal obligation.

Condominium
A condominium is a building in which ownership has been partitioned into unit interests. Each apartment owner receives a unit deed and owns an individual unit, but common areas are shared with the other unit owners of the building.

Condominium Declaration
Condominium declaration is the document that, when recorded, creates a condominium. It is also called a master deed.

Conforming Loan
A conforming loan is a mortgage issued within the framework of FNMA/FHLMC (Fannie Mae/Freddie Mac) guidelines in terms and amount. In general, any loan which does not meet these guidelines is a non-conforming loan. A loan which does not meet guidelines specifically because the loan amount exceeds the guideline limits is known as a jumbo loan. The Office of Federal Housing Enterprise Oversight (OFHEO) set the criteria on what constitutes a conforming loan limit that Fannie Mae and Freddie Mac can buy. Criteria include debt-to-income ratio limits and documentation requirements. The maximum loan amount is based on the October-to-October changes in median home price, above which a mortgage is considered a jumbo loan, and typically has higher rates associated with it.

Conformity
Conformity is the homogeneous uses of land within a given area which results in maximizing land value.

Consent Decree
A consent decree is a compromise in civil lawsuits where the accused party agrees to stop the alleged illegal activity without admitting guilt or wrongdoing.

Consideration
Consideration is anything of value, as recognized by law, offered as an inducement to contract.

Construction Loan or Mortgage
A construction loan is a short-term loan to obtain funds to construct an improvement.

Constructive Eviction
Constructive eviction results from some action or inaction by the landlord that renders the premises unsuitable for the use agreed to in a lease or other rental contract.

Constructive Notice
Constructive notice occurs when one of any affected parties are bound by the knowledge of a fact even though they have not been officially notified of such fact.

Consumer Price Index (CPI)
CPI is an index indicating the change in prices of various commodities and services, providing a measure of the rate of inflation.

Contingency
Contingency is a condition in a contract relieving a party of liability if a specified event occurs or fails to occur.

Contract
A contract is a legally binding agreement between two parties, and in order to have a valid Contract of Sale in real estate there must be: an offer, an acceptance, competent parties, consideration, legal purpose, written documentation, description of the property, and signatures of the principals.

Contract Buyer's Policy
Contract Buyer's Policy is title insurance that protects the contract buyer against defects in contract seller's title.

Contract for Deed
Contract for deed is a contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments. It is also called installment land contract and installment plan.

Contract Rent
Contract rent is the amount agreed to in a lease.

Contract Vendee Sale
A contract vendee sale is a transaction in which a seller transfers beneficial rights, including the right of possession and obligations of ownership, to the purchaser and agrees to close at a future date under definite terms. Ownership can be transferred for tax purposes prior to the transfer of title.

Conventional Mortgage Loan
A conventional mortgage loan is a loan in which the federal government does not insure or guarantee payment to the lender, but is under the amount of a jumbo mortgage.

Conversion
A conversion is a change in ownership status. For example, rental housing may be converted to cooperative or condominium ownership. Such changes must conform to guidelines determined by the laws of New York State.

Convertible Apartment
A "convertible apartment" is a one or two bedroom apartment that has space to make another bedroom. The other bedroom can be made from the construction of a wall; however the new bedroom must have a window in order for it to be legally considered an additional room.

Conveyance
Conveyance is the transfer of title to real property.

Cooling-off Period
A cooling-off period is a three-day right of rescission for certain loan transactions.

Cooperative (Co-op)
A cooperative is a building owned by a corporation in which each apartment is allocated shares of stock as well as a proprietary lease. The amount of shares owned is determined by the value and size of the apartment. The cooperative building owns all of the units and the purchaser is buying stock in the corporation or the building.

Co-ownership
Co-ownership occurs when title to real property is held by two or more persons at the same time; also called concurrent ownership

Corporation Franchise Tax
A corporation franchise tax is a tax calculated on the net profit of the corporation.

Cost Approach
Cost approach is an appraisal method for estimating the value of properties that have few, if any, comparables and are not income-producing.

Counter-offer
A counter-offer is a new offer made by either the buyer or seller when rejecting a previous offer.

Covenant
A covenant is a promise made in writing.

Covenant Against Encumbrances
A covenant against encumbrances is a promise in a deed that the title does not cause encumbrances except those set forth in the deed.

Covenant for Further Assurances
Covenant for further assurances is a promise in a deed that the grantor will execute further assurances that may be reasonable or necessary to perfect the title in the grantee.

Covenant of Quiet Enjoyment
A covenant of quiet enjoyment is a promise in a deed or lease that the grantee or lessee will not be disturbed in the use of the property because of a defect in the grantor's or lessor's title or lease.

Covenant of Right to Convey
A covenant of right to convey is a promise in a deed that the grantor has the legal capacity to convey the title.

Covenant of Seisin
A covenant of seisin is a promise in a deed ensuring the grantee that the grantor has the title being conveyed.

Covenant of Warranty
A covenant of warranty is a promise in a deed that the grantor will defend the title against lawful claimants.

Credit Score
A credit score is a numerical rating provided on a credit report that establishes creditworthiness based upon a person's past credit/payment history and their current credit standing.

Cubic-foot Method
The cubic-foot method is a means of estimating reproduction or replacement cost, using the volume of the structure.

Cumulative-use Zoning
Cumulative-use zoning is a type of zoning permitting a higher priority use even though it is different from the type of use designated for the area.

Curtesy
Curtesy is a husband's interest upon the death of his wife in the real property of an estate that she either soley owned or inherited provided they bore a child capable of inheriting the estate.

Damages
Damages is the amount of financial loss incurred as a result of another's action.

Debt-to-Equity Ratio
The debt-to-equity ratio, also referred to as the loan-to-value ratio, is a rule used by banks requiring that a borrower invest a minimum amount of equity cash (usually 10% to 25% of the purchase price) as a condition to obtaining a mortgage. The rule is used in conjunction with the carrying-cost rule to determine how much money a bank will lend. A ratio of 1 means 100% leverage of a property, and higher than 1 means negative equity.

Debt Service
Debt Service is the cost of carrying a loan, usually through monthly payments, including the payment of interest and principal.

Debt-to-Income Ratio or Debt-Service Ratio
The debt-to-income ratio is the relationship of a borrower's monthly payment obligation on long-term debts divided by gross monthly income, expressed as a percentage. It is also known as bottom ratio.

Declaration
Declaration is the master deed containing legal description of the condominium facility, a plat of the property, plans and specifications for the building and units, a description of the common areas, and the degree of ownership in the common areas available to each owner.

Declaration of Restrictions
Declaration of restrictions is the instrument used to record restrictive covenants on the public record.

Dedication
Dedication is an appropriation of land or an easement therein by the owner to the public.

Dedication by Deed
Dedication by deed is the deeding of a parcel of land to a municipality.

Deductible Expenses
Deductible expenses are the costs of operating property held for use in business or as an investment. These expenses are subtracted from gross income to arrive at net income.

Deed
A deed is a written instrument transferring an interest in real property when delivered to the grantee.

Deed in Lieu of Foreclosure
Deed in lieu of foreclosure is the conveyance of title to the mortgagee by a mortgagor in default to avoid a record of foreclosure.

Deed Restriction
A deed restriction is a limitation on land use appearing in a deed.

Default
An act performed by the buyer, seller, tenant or landlord that breaches the contract of sale or lease and permits a claim for damages.

Defeasance Clause
A defeasance clause is a statement in a mortgage or deed of trust giving the borrower the right to redeem the title and have the mortgage lien released at any time prior to defaulting by paying the debt in full.

Defeasible Fee
A defeasible fee is a title subject to being revoked if certain conditions occur.

Deficiency Judgment
Deficiency judgment is a court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceed was deficient in fully satisfying the mortgage debt.

Delivery and Acceptance
Delivery and acceptance occurs when the transfer of a title by deed is given by the grantor to the grantee.

Demise
Demise is to convey an estate for years (leasing or letting).

Department of Housing and Urban Development (HUD)
See U.S. Department of Housing and Urban Development.

Depreciation
Depreciation is the expensing of the original cost of an asset, plus any qualified improvements, over its scheduled life as defined by the IRS. Depreciation deductions are permitted only for assets held by the production of income or used in a trade or business. The current term for depreciating residential real estate is 27.5 years.

Descent
Descent is the distribution of property to qualified heirs of one who has died intestate.

Description by Monument
Description by monument is a legal description of multiple-acre tracts of land and may refer to permanent objects such as a stone wall, large trees or boulders.

Description by Reference
Description by reference is a description on a deed that refers to a plat of subdivision or other legal document.

Devise
Devise is a gift of real property by will.

Disclosure and Informed Consent
Disclosure and informed consent is a real estate agent explaining his position in the agency relationship and the verbal and written consent of the relationship by the client.

Disclosure Statement
The disclosure statement is an accounting of all financial aspects of a mortgage loan required of lenders to borrowers in residential mortgage loan as regulated by the Federal Reserve Board.

Discount Points
Discount points are a one-time payment by the borrower to the lender at closing to obtain a lower interest rate on the mortgage loan. One point equals 1% of the loan amount; therefore, two points on a $100,000 mortgage would cost $2,000. It is also referred to as points.

Distribution Box
A distribution box is part of a septic system that distributes the flow from the septic tank evenly to the absorption field or seepage pits.

Dominant Tenement
Dominant tenement is land benefiting from an easement appurtenant.

Double-Declining-Balance Depreciation
A depreciation technique whereby the asset is divided by its useful life and this sum is doubled. Thereafter, in each succeeding year the accumulated depreciation is deducted from the original asset value to recomputed depreciation for the succeeding period. It is not available for real estate, but it is permissible for tangible property.

Down Payment
The down payment is the amount of money a buyer pays upfront in order to purchase a property. It is usually paid at the signing of the contract in the form of a certified check. The amount is typically 10% of the sales price.

Dower
Dower is the part of or interest in the real estate of a deceased husband given by law to his widow during her life.

Dual Agent
A dual agent is a broker or salesperson who represents both the buyer and seller in the same transaction.

Due Diligence
Due diligence is the investigation and review of a property to determine any legal liability.

Duplex Apartment
A duplex apartment consists of two levels.

Earnest Money Deposit
Earnest money deposit is the deposit a buyer makes at the time of submitting an offer to demonstrate the true intent to purchase. It is also called a binder or good faith deposit.

Easement
An easement is a non-possessory right of the use of land.

Easement Appurtenant
Easement appurtenant is a right of use in the adjoining land of another that moves with the title to the property benefiting from the easement.

Easement by Condemnation
Easement by condemnation is exercising the right of eminent domain.

Easement by Grant
Easement by grant is created by the express written agreement of the landowners, usually in a deed.

Easement in Gross
Easement in gross is a right of use of the land of another without the requirement that the holder of the right own adjoining land.

Eave
The eave is the lowest part of the roof that projects beyond the walls of the structure.

Economic Depreciation
Economic depreciation is the physical deterioration of property caused by normal use, damage caused by natural or other hazards, and failure to adequately maintain property.

Economic Life
The economic life is the period of time during which property is financially beneficial to an owner.

Effective Interest Rate
Effective interest rate is the actual rate of interest paid on a loan.

Egress
Egress is the exit from a building or parcel of land.

Enabling Acts
Enabling acts are laws passed by state legislatures authorizing cities and counties to regulate land use within their jurisdictions.

Encroachment
Encroachment is the trespassing on the land of another by a structure or other object.

Encumbrance
An encumbrance is a claim, lien, charge or liability attached to and binding upon real property.

Environment Impact Statement (EIS)
The environment impact statement is a requirement of the State Environmental Quality Review Act prior to initiating or changing a land use that may have an adverse effect on the environment.

Environmental Protection Agency (EPA)
The EPA is a federal agency that oversees land use.

Equal Credit Opportunity Act (ECOA)
ECOA is a federal law prohibiting discrimination in consumer laws.

Equitable Title
Equitable title is an interest in real estate such that a court will take notice and protect the owner's rights.

Equity
Equity is the difference between what something is worth and any loan secured by the asset (i.e. the value of a property less the outstanding mortgage). For example, if a home is worth $100,000 and the owner/borrower owes $65,000 on the mortgage loan secured by the borrower's home, then the borrower's equity is $35,000 or 35% equity in the home.

Equity of Redemption
The equity of redemption is the borrower's right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full, accrued interest and the lender's costs.

Erosion
Erosion is the wearing away of land by water, wind or other processes of nature.

Escheat
Escheat is the right of the government to take title to property left by a person who dies without leaving a valid will (intestate) or qualified heirs.

Escrow
A state where consideration, benefits, legal rights, document, or a sum of money is held by one person in trust for another, for the purpose of assuring performance under an agreement. Normally in a residential real estate sale, the attorney for the seller is the escrow agent for the deposit money securing the deal until closing. The money is held in an escrow account.

Estate
Estate refers to the collection of all assets of a deceased person. It is also the extent of interest a person has in real property.

Estate at Sufferance
Estate at sufferance is the continuation to occupy property after legal authorization has expired.

Estate at Will
Estate at will is a leasehold condition that may be terminated at any point by either party.

Estate for Life
This is the interest of real property that ends with the death of a person.

Estate for Years
Estate for years is a leasehold condition of definite duration.

Estate from Year-to-Year
Estate from year-to-year is a leasehold state that automatically renews itself for consecutive periods until terminated by notice by either party; also called estate from period-to-period or periodic tenancy.

Estate in Real Property
Estate in real property is an interest sufficient to provide the right to use, possession, and control of land. It also establishes the degree and duration of ownership.

Estoppel Certificate
An estoppel certificate is a document executed by a mortgagor or mortgagee setting forth the principal amount. The executing parties are bound by the amount specified.

Express Agency
An express agency is a relationship created by an oral or written agreement between a principal and an agent.

Eviction
An eviction is a landlord's action that interferes with the tenant's use or possession of the property. Eviction may be actual or constructive.

Exclusive Agency Agreement (Exclusive Listing)
An exclusive agency agreement is between a broker and a seller designating the broker as the seller's sole agent for the purpose of selling his or her property. This agreement does not preclude the owner from effectuating a sale on his own.

Exclusive Right To Sell Agreement
An exclusive right to sell agreement is between a broker and a seller designating the broker as the seller's sole representative for the purpose of selling property. In contrast to an exclusive-agency agreement, under an "exclusive-right-to-sell agreement", a commission is due to the broker even if the apartment is sold directly by the owner.

Exclusive Use Zoning
Exclusive use zoning is a type of zoning in which only the specified use may be made of property within the zoned district.

Executed Contract
An executed contract is an agreement that has been fully performed.

Fair Housing Act of 1968
The Fair Housing Act of 1968 is a federal act prohibiting discrimination in the sale, rental or financing of housing on the basis of race, color, religion, gender or national origin.

Fair Housing Act of 1988
This federal act prohibits discrimination in the sale, rental, financing, or appraisal of housing on the basis of race, color, religion, gender, national origin, handicap, or familial status.

Fair Housing Amendments Act of 1988
An amendment to the Fair Housing Act that prohibits discrimination based on a mental or physical handicap, or family status.

Fair Market Value
The fair market value is the price for a property agreed upon between a buyer and seller in a competitive market.

Fannie Mae
Fannie Mae is the nickname for the Federal National Mortgage Association (FNMA), a privately owned corporation that purchase FHA, VA, and conventional mortgages.

Fascia
The fascia is the area facing the outside of a soffit in house construction.

Federal Housing Administration (FHA)
The Federal Housing Administration is a federal agency that is part of the Department of Housing and Urban Development (HUD) that sets policy for mortgage underwriting and provides insurance for residential mortgages.

Fee Simple Absolute
Fee simple absolute is the inheritable estate in land providing the greatest interest of any form of title.

FHA Insured Loan
An FHA insured loan is a mortgage insured by the Federal Housing Administration.

Finance Charge
The finance charge is the amount imposed on the borrower in a mortgage loan, consisting of origination fee, service charges, discount points, interest, credit report fees, and finders' fees.

Financing
A loan secured by personal property, such as real estate property. The stock and lease of a cooperative corporation also constitute such personal property, and a loan secured by these instruments is referred to as a financing loan. Generally, real estate brokers refer to these financing loans as mortgages because they operate in the same manner, even though technically they are not.

First Mortgage
A first mortgage is a mortgage whose lien is superior to the lien of any other mortgage on the same property. This lien is superior either because it was recorded prior to all other mortgages or because the mortgagee of another mortgage which had been recorded ahead of this mortgage has agreed to have a lien subordinated to the lien of this mortgage.

Fixed Lease
A fixed lease is when the rental amount remains the same for the entire lease term; also called flat, straight or gross lease.

Fixed-Rate Mortgage
A loan secured by real estate that has a fixed interest rate and payment amount for the term of the loan (normally 15 or 30 years).

Fixture
A fixture is an item (appliance, light fixture, etc.) that is permanently attached to a property.

Flashing
Flashing is a metal material used in parts of the roof or walls to prevent water from penetrating the structure.

Flip Tax
A levy issued on the transfer of ownership by a cooperative corporation or condominium association against the seller, typically, though it may be against the buyer.. The flip tax is usually a percentage of the purchase price.

Floating Rate
A type of loan where the interest rate is not fixed over the term but is allowed to vary according to the change in a specified index, and is also referred to as an ARM (Adjustable Rate Mortgage).

Floating Slab
A floating slab is a type of foundation constructed by pouring the footing first and then pouring the slab after the footing has set.

Footing
The footing is the concrete base below the frost line that supports the foundation of the structure.

Foreclosure
Foreclosure is an enforcement process in which the lender under a defaulted mortgage takes title to the property for the purposes of selling it to recoup moneys owed under the mortgage.

421-A
The 421-a tax incentive program was created in 1971 to encourage housing development. Under the program, developers of apartment buildings on vacant or underutilized lots throughout the five boroughs receive a temporary exemption from property tax on the value added to the site by new construction. Condominiums can be sold at any price and the tax savings are passed on to the individual owner.

Freddie Mac
Freddie Mac is the nickname for Federal Home Loan Mortgage Corporation (FHLMC), a corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA, and conventional mortgages.

Frieze Board
Frieze board is the wooden member fastened under the soffit against a wall.

Front Foot
A front foot is a linear foot of property frontage on a street or highway.

Full Bath
A full bath is a bathroom that consists of a sink, toilet, and a bathtub or shower.

Fully Amortizing Mortgage
A fully amortizing mortgage is a mortgage with scheduled uniform payments that will fully pay-off the loan over the term of the mortgage.

Functional Obsolescence
Functional obsolescence is a flawed or faulty property that is rendered inferior because of advances or changes.


 
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