Earnest Money
Money given by a buyer to the seller or lender as part of the purchase price to bind a transaction or assure payment.

Entitlement
The VA home loan benefit is called entitlement. Entitlement for a VA guaranteed home loan. This is also known as eligibility.

Equal Credit Opportunity Act
A federal law which requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.

Equity
The difference between the fair market value and current indebtedness. The value an owner has in real estate over and above the current obligation against the property.

Escrow
An account held by the lender or neutral party into which the home buyer pays money for tax or insurance payments.

Farmers Home Administration
Also known as FMHA which provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere.

Federal Home Loan Mortgage Corporation Known by Many as Freddie Mac
This is a quasi-governmental agency that purchases conventional mortgage from insured depository institutions and HUD-approved mortgage bankers

Federal Housing Administration
Also known as FHA which is a division of the Department of Housing and Urban Development.

Federal National Mortgage Association known as Fannie Mae
A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages. This Federal program makes mortgage money more available and more affordable.

FHA Loan
A loan which is insured by the Federal Housing Administration open to all qualified home purchasers.

FHA Mortgage Insurance
Requires a fee to be paid at closing to insure the loan with FHA. The FHA mortgage insurance requires an annual fee which is usually no more than .5 percent of the current loan amount, which will be paid in monthly installments.

Federal Home Loan Mortgage Corporation
Also known as FHLMC who provides a secondary market for savings and loans by purchasing their conventional loans. Known by most people as Freddie Mac.

Firm Commitment
A promise by FHA to insure a mortgage loan for a specified property and borrower. A promise from a lender to make a mortgage loan to the borrower.

Fixed Rate Mortgage
A mortgage interest rate which will remain the same on a mortgage throughout the term of the mortgage for the original borrower.

Federal National Mortgage Association
Also known as FNMA, which is a secondary mortgage institution and is the largest single holder of home mortgages in the United States. FNMA buys FHA, VA, and conventional mortgages from lenders. FNMA is also known as Fannie Mae.

Foreclosure
When a lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.

Graduated Payment Mortgage
A flexible-payment mortgage with payments that increase for a specified period of time and then level off.

Guaranty
A promise from one party to pay a debt contracted by another if the original party fails to pay or perform according to a contract.