Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.
Home Equity Conversion Mortgage (HECM)
A special type of mortgage that enables older home owners to convert the equity they have in their homes into cash, using
a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower
does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be
repaid until the borrower no longer occupies the property. Sometimes called a reverse mortgage.
home equity line of credit
A mortgage loan, which is usually in a subordinate position, that allows the borrower to obtain multiple advances of the
loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower's
equity in a property.
A thorough inspection that evaluates the structural and mechanical condition of a property. A satisfactory home
inspection is often included as a contingency by the purchaser. Contrast with appraisal.
Fannie Mae's adjustable-rate conventional reverse mortgage, which allows older homeowners to borrow against the value of
their homes and receive the proceeds according to the payment option they select. The amount available is based on the
number of borrowers and their ages and the adjusted property value. Anyone 62 years or older who either owns his or her
own home free and clear or has very low mortgage debt is eligible.
A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a
condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its
homeowner's warranty (HOW)
A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by
the builder or property seller as a condition of the sale.
HomeStyleŽ Mortgage Loan
A mortgage that enables eligible borrowers to obtain financing to remodel, repair, and upgrade their existing homes or
homes that they are purchasing. The financing takes the form of a conventional second mortgage or a Federal Housing
Administration (FHA) Section 203(k) first mortgage.
housing expense ratio
The percentage of gross monthly income that goes toward paying housing expenses.
HUD median income
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of
Housing and Urban Development (HUD).
A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement
include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented
by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the
seller's net proceeds and the buyer's net payment at closing. The blank form for the statement is published by the
Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the "closing statement" or