A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
facilities manager
A facilities manager is a professional responsible for overseeing the operation, maintenance, and management of an organization’s physical buildings and grounds. Their duties include ensuring the functionality, safety, and efficiency of the built environment, which involves tasks such as coordinating maintenance services, managing budgets, and implementing space planning strategies. Facilities managers play a crucial role in creating a conducive work environment, optimizing facility use, and supporting the organization’s overall operational goals.
factors of production
According to economists there are four essential resources needed to produce goods and services: land, labor, capital and entrepreneurship. These are called ‘factors of production.’
Fair and Accurate Credit Transaction Act of 2003 (FACTA)
The Fair and Accurate Credit Transaction Act of 2003 (FACTA) added new sections to the federal Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681 et seq.), intended primarily to help consumers fight the growing crime of identity theft. Accuracy, privacy, limits on information sharing, and new consumer rights to disclosure are included in FACTA. (See Fair Credit Reporting Act)
Fair Appraisal Act
A California law requiring that every real estate sales contract must include a notice stating that any appraisal must be unbiased, objective, and not influenced by factors such as race, color, religion, gender, sexual orientation, marital status, medical condition, military or veteran status, national origin, source of income, ancestry, disability, genetic information, or age.
Fair Credit Reporting Act
The Fair Credit Reporting Act gave consumers the rights of access to, and correction of, credit reports. FCRA can be found in 15 U.S. Code section 1681, et seq. (See credit report, FACTA) (Fair Credit Reporting Act)
fair deal on mortgage
Receiving a fair “price” (recall price = interest rate/points combination) on a mortgage loan corresponding to what you “deserve” considering your personal risk factors, income, credit score, and property type. If you don’t get several financing quotes from different lenders, and dissect those quotes, you might get a much higher price on your loan than you “deserve.”
fair deal on mortgage
Receiving a fair “price” on a mortgage loan corresponding to what you “deserve” considering your personal risk factors, income, credit score, and property type. If you don’t get several financing quotes from different lenders, and dissect those quotes, you might get a much higher price on your loan than you “deserve.”
Fair Employment and Housing Act
California’s Fair Employment and Housing Act (FEHA) (Sections 13100-13196 of the Government Code) prohibits housing discrimination based on marital status as well as race, color, religion, sex, national origin or ancestry. The Department of Fair Employment and Housing enforces the law, which is based on the former Rumford Fair Housing Act.
CA Fair Employment and Housing Website
Fair Housing Act
Pursuant to the federal Fair Housing Act, any offer to sell, rent, buy, or exchange property shall not contain any preference, limitation, or discrimination based on race, color, religion, sex, national origin, handicap, familial status, or an intention to make such preference, limitation or discrimination.
Fair Housing Amendment Act of 1988
Amends the Fair Housing Act of 1968 to include handicapped persons and families with children.
Fair Housing Compliance program
All REALTORS® are bound by the REALTOR® Code of Ethics to comply with the Fair Housing laws. The Code, however, does not represent the brokerage’s personal commitment to fair housing. Thus, a brokerage compliance program is important because:
- There is no obligation for a plaintiff, tester or fair housing agency to give advance warning before it files a complaint.
- Everyone is presumed to know the legal obligations of fair housing.
An effective Fair Housing compliance program consists of the firm’s policy and commitment to fair housing laws, agent education and training, regular and systematic documentation of the firm’s practice of affording equal opportunity service, and identification and correction of failures in performance.
fair housing tester
Fair housing testers are individuals who, often on behalf of governmental agencies or non-profit organizations, pose as potential renters or buyers of real estate to gather information and determine whether housing providers are complying with anti-discrimination laws. These testers are trained to identify and document practices that may indicate bias against certain groups based on race, gender, religion, disability, familial status, or national origin. The information collected by fair housing testers can be used to initiate legal action or inform policy-making aimed at preventing discriminatory practices in housing.
Fair Housing Unit (FHU)
The Fair Housing Unit (FHU) seeks to promote fair housing and equal housing opportunity by requiring awardees of capital program funding and tax credits to comply with state and federal civil rights laws in the marketing of the low-income housing they develop.
Fair Isaac and Company
Fair Isaac and Company is an independent company that came up with the credit scoring method and software, known as FICO score, used by banks and lenders, insurers and other businesses. (See FICO score)
Fair Isaac and Company
Fair Isaac and Company is an independent company that came up with the credit scoring method and software, known as FICO score, used by banks and lenders, insurers and other businesses. (See FICO score)
fair lending
The prohibition against unlawful discrimination in lending. The Fair Housing Act prohibits discrimination on the basis of race, color, religion, national origin, sex, familial status, or disability. In addition, the Equal Credit Opportunity Act (which is not administrated by HUD) prohibits discrimination because of age, receipt of public assistance, marital status, and the good faith exercise of rights under the Consumer Protection Act.
familial status
Familial status is defined as one or more individuals who have not obtained the age of eighteen (18) years, being domiciled with a parent or other person having custody, or anyone who is pregnant. It is therefore unlawful to refuse housing to anyone with children under the age of 18 or anyone who is pregnant, except when such housing meets the definition of housing for older persons.
Fannie Mae
The Federal National Mortgage Association, popularly known as “Fannie Mae,” an active participant in the secondary mortgage market. Fannie Mae was established as a federal agency in 1938 for the purpose of purchasing FHA loans from loan originators to provide some liquidity for government-insured loans in a depression-wracked economy when few lending institutions would undertake this type of loan.
Farm Credit System
A national banking system for financing the activities of farmers and ranchers. Farm Credit Administration Website
Farm Service Agency (FSA)
Formerly the Federal Agricultural Mortgage Corporation (FAMC or Farmer MAC), the FSA is a federal agency of the Department of Agriculture. FSA offers programs to help families purchase or operate family farms. It also provides loans to help families purchase and improve single-family homes in rural areas. The FSA provides assistance to rural and agricultural businesses and industry through the Rural Business and Cooperative Development Service. Loan programs fall into two categories: guaranteed loans, made and serviced by private lenders and guaranteed for a specific percentage by FSA, and loans made directly by the FSA.Farm Service Agency Website
Farmer Mac
Farmers Home Administration; provides financing of agricultural real estate and rural housing loans and liquidity to agricultural and rural housing lenders.Farmers Home Administration Website
fast-track construction
Fast-track construction is a project delivery approach where design and construction phases overlap to expedite the overall project timeline. This method allows for the start of construction before the complete design is finalized, aiming to reduce the project’s duration. By overlapping these phases, potential delays are minimized, but it requires close coordination and communication among all stakeholders to manage the risks associated with incomplete designs.
fat
See lipids
feasibility study
A study to determine the likelihood that a proposed project or development will fulfill the objectives of investors.
federal agency
Federal agency refers to the United States of America, the President, or any department of the United States or any corporation, agency, or instrumentality, created, designated, or established by the United States.
federal bank
Federal bank means a national banking association, savings and loan association, or savings bank that exists by authority of the United States, the main office of which is located in the commonwealth.
federal banking agencies
The term federal banking agencies refers to the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.
federal branch
Federal branch means a branch in the commonwealth of any out-of-state federal bank.
federal credit union
Federal credit union means a credit union organized under the provisions of the Federal Credit Union Act.
Federal Deposit Insurance Corporation (FDIC)
An independent federal agency that insures the deposits in commercial banks. See FDIC Website and Federal Deposit Insurance Act—Full Text
Federal Emergency Management Agency (FEMA)
Federal Emergency Management Agency (FEMA) is the federal agency that is responsible for assisting the nation in the event of a disaster providing response and recovery efforts.
Federal Fair Housing Act
In 1968, Congress enacted Title VIII of the Civil Rights Act, called the Federal Fair Housing Act, which declared a national policy of providing fair housing throughout the United States (reference Sections 3601-3631 of Title 42, United States Code). This law makes discrimination based on race, color, sex, familial status, handicap, religion or national origin illegal in connection with the sale or rental of most dwellings and any vacant land offered for residential construction or use. The law does not prohibit discrimination in other types of real estate transactions, such as those involving commercial or industrial properties. The law is administered by the Office of Equal Opportunity (OEO) under the direction of the Secretary of the Department of Housing and Urban Development (HUD).
federal funds rate
The interest rate the Federal Reserve charges its member banks on uncollateralized loans. (See Federal Reserve System)
Federal Home Loan Bank System (FHLB)
Regulates the nation’s savings and loan associations, much like the Federal Reserve governs the commercial banking industry. See Federal Home Loan Bank System Website
Federal Home Loan Mortgage Corporation (FHLMC)
Commonly known as “Freddie Mac,” a federally chartered corporation established in 1970 for the purpose of purchasing mortgages in the secondary market. Freddie Mac was created as a part of the savings association system and, while it is not so limited, its loan purchase policies are designed to accommodate savings association needs. It functions with an independent board of directors but is subject to oversight by HUD. Freddie Mac Online
Federal Housing Administration (FHA)
A federal agency established in 1934 under the National Housing Act to encourage improvement in housing standards and conditions, to provide an adequate home-financing system through the insurance of housing mortgages and credit and to exert a stabilizing influence on the mortgage market. FHA was the government’s response to a lack of quality housing, excessive foreclosures and a building industry that collapsed during the depression. (See National Housing Act) Federal Housing Administration Website
federal housing assistance program
The federal housing assistance program is the housing assistance program under which a mortgage loan or project receives assistance from a federal agency, department, or other federally related entity in the form of a federal guarantee, insurance, co-insurance, interest reduction payments, rental subsidies, commitment for permanent financing of a project upon completion of construction, or other assistance.
Federal Housing Finance Agency (FHFA)
Created in 2008, the FHFA serves as regulator and conservator of Fannie Mae and Freddie Mac and regulator of the 12 Federal Home Loan Banks. Federal agency created following the merger of the Federal Housing Finance Board (FHFB) and the Office of Federal Housing Enterprise Oversight (OFHEO).www.fhfa.gov
Federal income taxes
This is what you pay to the U.S. Internal Revenue Service (IRS) based on your income and tax rate. These funds go to run the government – the military, IRS, SEC, TSA, Social Security, Dept. of Education, Dept. of Transportation, pay for the past spending, fund Medicare and Medicaid, government employee Pensions, the Dept. of the Treasury, etc. etc. etc.
Federal Insurance Contributions Act (FICA)
The Federal Insurance Contributions Act (FICA) is a United States federal law that mandates a payroll tax on both employees and employers to fund Social Security and Medicare programs. The tax is split between the employer and the employee, with each paying half of the total contribution rate, which covers both Social Security and Medicare.
Federal National Mortgage Association (FNMA)
Popularly known as “Fannie Mae,” an active participant in the secondary mortgage market. Fannie Mae was established as a federal agency in 1938 for the purpose of purchasing FHA loans from loan originators to provide some liquidity for government-insured loans in a depression-wracked economy when few lending institutions would undertake this type of loan.
Federal Open-Market Committee (FOMC)
The Federal Open Market Committee (FOMC) is a branch of the Federal Reserve System in the United States. It is responsible for overseeing the nation’s open market operations, which involve buying and selling government securities to control the supply of money and credit in the economy. The FOMC is composed of 12 members, consisting of the seven members of the Federal Reserve Board, the president of the Federal Reserve Bank of New York, and four of the remaining 11 Reserve Bank presidents, who serve on a rotating basis.
Federal Reserve Board
The Federal Reserve Board is the governing body of the Federal Reserve System, the central bank of the United States. It oversees the nation’s monetary policy, regulates banks, maintains financial stability, and provides financial services to the government and the public.
Federal Reserve System (The Fed)
The nation’s central bank created by the Federal Reserve Act of 1913. Its purpose is to help stabilize the economy through the judicious handling of the money supply and credit available in this country. The system functions through a seven-member Board of Governors (appointed by the President) and 12 Federal Reserve District Banks, each with its own president. The system sets policies and works with the privately owned commercial banks. See Federal Reserve Website
Federal Savings and Loan Insurance Corporation (FSLIC)
Created by the National Housing Act of 1934, the FSLIC, which was administered by the FHL Bank Board, insured savings and loan deposits until 1989.
Federal Trade Commission (FTC)
Under the Federal Reserve Board, the Federal Trade Commission (FTC) investigates and eliminates unfair and deceptive trade practices. It enforces and monitors the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Home Mortgage Disclosure Act, and the Truth in Lending Act. See the Federal Trade Commission Website
Federal Unemployment Tax Act (FUTA)
The Federal Unemployment Tax Act (FUTA) is a United States federal law that imposes a payroll tax on employers to fund state workforce agencies. This tax is used to provide unemployment benefits to workers who have lost their jobs. Unlike other payroll taxes, FUTA is paid solely by employers, based on the wages paid to employees, up to a limit on taxable income.
Federal Water Pollution Control Act
Enacted by Congress in 1972, this federal law administered by the EPA regulates the release of pollutants into navigable waters. Federal Water Pollution Control Act of 1972
federally regulated institution
An institution that is supervised by a federal financial institutions regulatory agency. This includes a national or a state-chartered bank and its subsidiaries, a bank holding company and its non-bank subsidiaries, a federal savings association and its subsidiaries, a federal savings and loan holding company and its subsidiaries, and a credit union.
federally related transaction
A federally related transaction is any real estate—related financial transaction involving or identified as such by a federal institution’s regulatory agency. This includes all loans made by federally chartered banks and savings and loans. They also include the use of real property as security for a loan or an investment.
fee
Any cost that the borrower(s) must pay for services.
fee simple absolute
The maximum possible estate or right of ownership of real property, continuing forever.
fee simple defeasible
An estate in land in which the holder has a fee simple title subject to being divested upon the occurrence of a specified condition; also called a qualified fee or a defeasible fee. There are two categories of fee defeasible estates–fee simple determinable and fee simple subject to a condition subsequent. The term fee simple determinable implies that the duration of the estate can be determined from the deed itself. This is not true of a fee simple subject to a condition subsequent, in which case the estate’s duration depends on the grantor’s independent choice of whether to terminate the estate. (See fee simple determinable, fee simple subject to a condition subsequent)
fee simple determinable
A fee simple determinable is an estate in real property that exists “so long as,” “while” or “during the period” that a certain prescribed use continues. Such use is described in the grant of conveyance. For example, a conveyance to the University of Knowitall “so long as” the real estate is used for educational purposes would give the university title, provided the granted land is used as prescribed. If, at some future time, the university were to stop using the property for educational purposes, title would revert to the original grantor, if living, or to his or her heirs if the grantor is deceased. A fee simple determinable automatically ends when the purpose for which it has been prescribed terminates. Upon the grant of a fee simple determinable, there remains in the grantor a possibility of reverter.
fee simple estate
The maximum possible estate one can possess in real property. A fee simple estate is the least limited interest and the most complete and absolute ownership in land; it is of indefinite duration and is freely transferable and inheritable. Fee simple title is sometimes referred to as “the fee.” (See fee title)
fee simple qualified
In a fee simple qualified, the right of possession is restricted in some way.
fee simple subject to a condition subsequent
A fee simple subject to a condition subsequent is an estate conveyed “provided that,” “on the condition that” or “if” it is used for a specific purpose. If it is no longer used for that purpose, it reverts to the original grantor or his heirs. This type of estate is much the same as a fee determinable, except that in a fee determinable conveyance, the words are of duration while a fee condition subsequent refers strictly to a specific condition. In addition, unlike a fee determinable, when fee condition subsequent property is no longer used for its prescribed purpose, the original grantor (or heirs) must physically retake possession of the property within a reasonable period of time after the breach (i.e., the grantor must exercise his or her right of reentry). Any transaction involving a fee simple defeasible estate should be referred to an attorney for a professional opinion.
fee title
A relationship that implies a position of trust or confidence wherein one person is usually entrusted to hold or manage property or money for another. The term fiduciary describes the faithful relationship owed by an attorney to a client or by a broker (and salesperson) to a principal. The fiduciary owes complete allegiance to the client. Among the obligations that a fiduciary owes to his or her principal ane the duties of loyalty, obedience and full disclosure; the duty to use skill, care and diligence; and the duty to account for all monies. (See law of agency, principal)
feedback
The return to the input of a part of the output of a machine, system, or process.
feudalism
A medieval system of economic and political organization in which a king or other sovereign was the source of all rights. The right to possess real property was granted by the sovereign to an individual as a life estate only. Upon the death of the individual, title passed back to the sovereign, not to the decedent’s heirs. Feudalism predated the birth of the modern nation-state.
FHA 203K
The Section 203(k) program is HUD’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding home ownership opportunities.
FHA Upfront Mortgage Insurance Premium (UFMIP)
The FHA provides loan insurance as a condition of the loan and charges the borrower 1/2% of the loan balance as a UPFRONT premium, which can be financed over the term of the loan. Because of this loan insurance, the FHA will lend as much as 97% of the purchase price. FHA loan insurance works the same way as the private loan insurance except that it cannot be canceled when the loan balance declines to 80% of the property’s market value.
FICO score
Consumer credit score developed by the Fair Isaac Corporation; found at www.myfico.com.
fictitious business name
A business name that DOES NOT include the surname of the individual owner, and each of the partners or the nature of the business is not clearly evident by the name.
For example, doing business under a name like “Smith & Jones Associates” or “Smith & Jones Sons” WOULD require a Fictitious Business Name be registered. Even though the surname of the owner is stated, the words following the surname suggest other owners that are not specifically named.
HOWEVER, doing business under a name like “John Smith Plumbing” or “Smith Plumbing” WOULD NOT require a Fictitious Business Name be registered, because the owner (John Smith) is conducting business under his legal name.
In the case of a corporation, a Fictitious Business Name is any name other than the EXACT corporate name as stated in the articles of incorporation.
fictitious business name statement
A fictitious business name statement is a document indicating the name under which a business is operating; filed with the county where the business is located.
fictitious business name statement
A fictitious business name statement is a document indicating the name under which a business is operating; filed with the county where the business is located. (See fictitious business name)
fiduciary
A relationship that implies a position of trust or confidence wherein one person is usually entrusted to hold or manage property or money for another. The term fiduciary describes the faithful relationship owed by an attorney to a client or by a broker (and salesperson) to a principal. The fiduciary owes complete allegiance to the client. Among the obligations that a fiduciary owes to his or her principal are the duties of loyalty, obedience and full disclosure; the duty to use skill, care and diligence; and the duty to account for all monies.
Figuring Depreciation
- Determine Cost Basis—Cost basis is usually the purchase price plus the buyer’s capitalized closing cost, as determined by a tax expert.
- Calculate Depreciable Improvements—Allocate basis between land and improvements, expressed as percentages of the cost basis. (In other words, the buildings are what percentage of total cost?) Investors frequently use an appraisal, property tax bill allocation, or comparable sales to arrive at the allocation.
- Divide by 27.5—Divide depreciable improvements by 27 1/2 years to estimate 12 months depreciation, ignoring mid-month convention.
- Worksheet—Fill in the information in the appropriate field, and click on each “EQUALS” to calculate that item.Depreciation for Residential RentalsPurchase Price PLUS: Capitalized Closing Costs+ EQUALS: Cost Basis= TIMES: Improvements (percentage of total cost)× %EQUALS: Depreciable Improvements= DIVIDED BY: 27.5÷ 27.5 EQUALS: *12 Months Depreciation= *The estimates above ignore mid month convention. Mid month convention only allows 11 1/2 months depreciation the first and last year of ownership.
file transfer protocol (FTP)
A protocol for transferring files from one computer to another; typically used to upload files to a server.
filled land
An area of a property where the grade has been raised by depositing dirt, gravel or rock. Under most circumstances a seller (broker) has a duty to disclose to a buyer the fact that a property is on filled land.
final escrow instructions
Statements prepared by the escrow agent which reflect the final figures and instructions required to close escrow. (See escrow instructions)
final rule
As used in this chapter, applies to transactions for which the creditor or mortgage broker receives an application on or after that date, except that new provisions concerning pre-disclosure activity of creditors, and revisions to existing regulations concerning the rule’s effect on State laws and State exemptions, will be effective on that date without regard to whether an application has been received.
finance charge
The finance charge is the total cost of a loan or charge for the use of money, including any extensions or grant of credit, regardless of the characterization of the same, and includes any interest, time price differential, points, premiums, finder’s fees, and other charges levied by the residential mortgage lender against the person obtaining the loan or against the seller, lender, mortgagee, or any other party to the transaction except any actual settlement costs.
The finance charges plus the actual settlement costs charged by the residential mortgage lender includes all charges made by the residential mortgage lender to the residential mortgage debtor other than the principal of the loan.
In computing the finance charge on any mortgage that does not require the full amount of the first year’s interest to be paid during the first year and on a variable interest rate mortgage, interest must be calculated at the rate applicable to the first year of the loan.
Financial Accounting Standards Board
The Financial Accounting Standards Board (FASB) is the independent, private-sector, not-for-profit organization that establishes financial accounting and reporting standards for public and private companies. It derives its authority to set accounting standards from the U.S. Securities and Exchange Commission (SEC).
financial audit report
A financial audit report is a report prepared in connection with a financial audit conducted in accordance with generally accepted auditing standards prescribed by the American Institute of Certified Public Accountants by a certified public accountant licensed to do business in the United States. The audit report includes the following: Financial statements, notes, and supplementary information, prepared in conformity with generally accepted accounting principles; an expression of opinion regarding whether the financial statements are presented in conformity with generally accepted accounting principles, or a statement that such an opinion cannot be expressed and the reasons why.
financial institution
A financial institution is a bank, insurance company, credit union, savings and loan association, investment trust, or other organization held out to the public as a place of deposit for funds or medium of savings or collective investment.
Financial Institutions Reform, Recovery and Enforcement Act (FIRREA)
Legislation that in 1989 abolished the FSLIC and established a new deposit insurance fund, SAIF, for savings institutions; appropriated funds and created the Resolution Trust Corporation to dispose of failed thrifts; imposed wide-ranging changes in savings institution investment activities and operations; and created the Office of Thrift Supervision as part of a restructuring of the federal thrift regulatory and supervisory systems. (See Resolution Trust Corporation)
financial intermediaries
A financial institution that accepts deposits and makes loans.
Financial Management Rate of Return (FMRR)
A multi-year analysis of rate of return. Used by investors in medium and large properties (occasionally on small properties). Multi-year cash flows and net sale proceeds are analyzed using discounted cash flow techniques to solve for the Financial Management Rate of Return (FMRR).
FMRRs are the best rate of return indicator, because they require an analysis of the investor’s entire holding period, not just a single year. The discounting process takes into consideration the time value of money, and thereby produces a more realistic rate of return.
financial statement
A brief summary of a person’s assets, liabilities and earnings records.
financing instrument
Another name for “promissory note”. It is a borrower’s personal promise to repay a debt according to the agreed terms.
financing statement
Security interests in chattels (personal property) are created by an instrument known as a security agreement. To give notice of a security interest, a financing statement must be recorded. (See personal property, Uniform Commercial Code)
finder’s fee
A finder’s fee in real estate refers to a payment made to an individual or entity who helps connect a buyer with a seller of a property, often without being directly involved in the transaction itself. This fee is compensation for the service of locating the property or facilitating the transaction, and is subject to regulations regarding payment of finder’s fees to unlicensed individuals.
Findings of Fact and Conclusions of Law
This is an official document written by an Administrative Law Judge. It sets forth the facts the judge found to be true and the conclusions of law he/she reached regarding those facts.
Fingerprint clearance card (AZ)
All applicants for original licensure must have a background check completed and receive a fingerprint clearance card from the Arizona Department of Public Safety. Scanned images of front and back of the fingerprint clearance card must be submitted with the application package.
fire insurance requirement form
A statement signed by the “borrower” agreeing to comply with the lender’s requirements for fire insurance coverage.
fire rating
A rating of the length of time it takes a fire to penetrate a barrier. Designates the ability of a material to contain a fire in a carefully controlled test setting for a specified period of time. A material tested in a laboratory that adequately contains a fire for two hours and meets other requirements during the laboratory fire test, is given a two-hour fire resistance rating. Fire-resistance ratings are based on full-scale tests under controlled conditions and are generally recognized by building code authorities and fire insurance rating bureaus. Requirements for fire-resistance ratings are usually set by local building code officials based on the expected occupancy of the building.
fire stops
Fire stops are wood blocks placed at intervals between wall studs to slow the spread of fire.
firewall
A computer system used as a security measure to protect a computer system or network from unauthorized access.
first-time home buyer
A first-time home buyer, according the I.R.S., is a person who has not owned a primary residence for three years prior to the purchase date of the home for which they are claiming the first-time homebuyer’s credit. (See American Recovery and Reinvestment Act of 2009, and http://www.irs.gov/newsroom/article/0,,id=204671,00.html for summaries.
fiscal policy
The government’s policy in regarding to taxation and spending programs. The difference between these two areas determines the amount of money the government will withdraw from or feed into the economy, which can stimulate or restrain economic growth.
fiscal policy
Government spending policies that influence economic conditions. Through fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates in an effort to control the economy.
five-year forecast
A five-year forecast is a strategic planning tool that projects the expected financial performance, market conditions, and operational results of a business, project, or economy over a five-year period. It typically includes projections for revenue, expenses, cash flow, and other key financial metrics. Five-year forecasts are essential for budgeting purposes and are often used to attract investors by demonstrating the future potential and stability of a business. In the context of economics or specific industries, such as real estate or technology, these forecasts can also provide insights into anticipated market trends and economic conditions, helping stakeholders prepare for future changes in the market environment.
Fix-up cost
Estimated costs the seller will incur to ready the property for viewing, such as the cost to add color to the landscaping, paint, and replace plumbing or electrical fixtures which are beyond repair or of unacceptable appearance, etc.
fixed expenses
Those recurring expenses that have to be paid regardless of whether the property is occupied; for example, real property taxes, hazard insurance and debt service. These expenses contrast with operating expenses necessary to maintain the production of income from the operation of a property. (See operating expenses)
fixed-fee
A contractor submits a bid proposing a fixed amount to do a job. Most construction bids are made on this basis. (See cost-plus)
fixed-rate loan/mortgage
1. A loan with the same rate of interest for the life of the loan. 2. A loan secured by mortgage or deed of trust on real estate that carries an interest rate that does not change over the life of the loan.
fixtures
A fixture is an article that was once personal property but has been so affixed to real estate that it has become real property. Whether an article is a fixture depends on the intention of the parties and may be determined by the manner in which the item is attached, its type and adaptability to the real property, the purpose it serves, and the relationship of the parties. (See trade fixtures)
flashing
Sheet metal or other impervious material used in roof and wall construction as a barrier to water seepage. (See construction terms)
flat fee
A property management fee expressed as a dollor amount per year or month. (See percentage fees)
flipping
Property flipping is the sale of the same property in a relatively short time frame with increasing values on the same property.
float
Float is getting a final rate and fees set nearer to the settlement date. If rates decline, the borrower benefits, but if they increase, the borrower risks paying a higher rate.
flood hazard areas
Locations specified on Federal Emergency Management Agency (FEMA) maps indicating areas that are subject to flooding. The seller’s agent is required to inform potential buyers if the agent has knowledge that a property is located in such an area.
flood insurance
Typically a separate policy from homeowners insurance that covers damages caused by a flood. A river overflowing it’s banks and flooding an insured’s home would be covered by flood insurance. Note that a burst pipe flooding a home is typically covered by homeowners insurance, not a flood policy.
flue
The pipe or conduit that allows combustion gasses to exit the house. (See combustion gasses)
flush
To open a cold-water tap to clear out all the water that may have been sitting for a long time in the pipes. In new homes, to flush a system means to send large volumes of water gushing through the unused pipes to remove loose particles of solder and flux.
For Sale By Owner (FSBO)
Some owners choose to sell their own property without the aid of a real estate broker. “For Sale By Owner” properties are often a source of listings when the owner is unsuccessful finding qualified buyers.
forbearance
The act of refraining from taking legal action despite the fact that payment of a promissory note in a mortgage or deed of trust is in arrears. It is usually granted only when a borrower makes a satisfactory arrangement by which the arrears will be paid at a future date.
force and effect of law
A phrase referring to the principle that an administrative regulation has the same significance and legal weight as a law or act of legislature.
force-placed insurance
An insurance policy taken out by a lender or creditor when a customer does not carry insurance on an asset. The charges for this insurance are passed on to the customer.
forces for change
forces for change: economic, physical, political, social
forcible entry and detainer
Forcible Entry and Detainer (FED) is a legal process used by property owners to regain possession of their property from occupants who are unlawfully holding it, such as tenants who remain after lease termination or nonpayment of rent.
forecast absorption
The rate at which properties in a subdivision are expected to sell.
foreclosure
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title in the mortgage property to either the holder of the mortgage or a third party who may purchase the realty at the foreclosure sale, free of all encumbrances affecting the property subsequent to the mortgage. There are three general types of foreclosure proceedings: judicial foreclosure, nonjudicial foreclosure and strict foreclosure.
foreclosure consultant
A foreclosure consultant is a person who makes any solicitation, representation, or offer to a homeowner to perform for compensation or who, for compensation, performs any covered service that the person represents to prevent or postpone a foreclosure sale; or to avoid or ameliorate the impairment of the homeowner’s credit; or assist the homeowner to accomplish a foreclosure reconveyance.
foreclosure reconveyance
Foreclosure reconveyance is a transaction that involves the transfer of title to a residence in foreclosure by a homeowner during a foreclosure proceeding by either the transfer of an interest in the residence or creation of a mortgage or other lien during the foreclosure process that allows the acquirer to obtain title to the residence in foreclosure by redeeming the property as a junior lienholder; or the subsequent conveyance or promise of a subsequent conveyance of an interest in the residence to the former homeowner by the acquirer, or a person acting in concert with the acquirer, that allows the former homeowner to remain in possession of the residence following the completion of the foreclosure proceeding.
foreclosure sale
A foreclosure sale is the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale.
Foreign Investment in Real Property Tax Act (FIRPTA)
Enacted by the United States Congress in 1985, the act requires buyers to withhold estimated taxes equal to 10% of the sale price of a property sold or exchanged by a foreign person. The withholdings must be reported and paid to the Internal Revenue Service within 10 days of closing. The act applies to sales of personal residences with prices of $300,000 or more.
foreign judgment
The recognition of a foreign judgment occurs when the court of one jurisdiction accepts a judicial decision made by the courts of another (foreign) jurisdiction, and enforces a judgment in substantially identical terms without rehearing the substance of the original lawsuit.
foreign person
A Foreign Person is a nonresident alien individual, foreign corporation that has not made an election under section 897(i) of the Internal Revenue Code to be treated as a domestic corporation, foreign partnership, foreign trust, or foreign estate. It does not include a resident alien individual.
foreign trade zones (FTZs)
A Foreign Trade Zone (FTZ) is a designated area within a country where goods can be imported, handled, manufactured, or reconfigured without being subject to customs duties until they enter the domestic market. These zones are typically located near ports or airports and aim to encourage international trade by reducing regulatory and tax burdens on businesses. FTZs provide companies with advantages such as deferred or reduced duties, streamlined customs procedures, and the ability to store goods duty-free for extended periods.
forfeiture
Breach of a condition subsequent in a deed; entitles grantor or grantor’s successor to reacquire title to the property. (See condition subsequent)
Form 1073
Form 1073 is the Individual Condominium Unit Appraisal Report of Fannie Mae and Freddie Mac.
Form 2075
Form 2075 is the Desktop Underwriter Property Inspection Report.
form appraisal report
Any of the relatively brief standard forms prepared by agencies such as the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association and others for routine property appraisals. Narrative appraisal report: A detailed written presentation of the facts and reasoning behind an appraiser’s estimate of value.
form-based planning
Type of land use planning permitted in California that provides for a mix of land uses while taking into account the relationship of buildings and public areas.
formal career assessments
Standardized tests and inventories that have been developed by experts according to scientific principles of test construction; specific steps must be followed in developing, administering, and interpreting; typically produce scores or score profiles.
formal education
Education that is structured, longer in duration, and possibly more in-depth than information training.
formaldehyde
A colorless, pungent, and irritating gas, used chiefly as a disinfectant and preservative and in synthesizing other compounds like resins. (See urea-formaldehyde)
National Safety Council on Formaldehyde
foundation
Base of building, typically of poured concrete consisting of walls or footings. (See anchor bolts, sill)
four corners of the contract
The meaning of a written contract, will or deed as represented solely by its textual content, without relying upon other resources or witnesses.
four factors of production
The four elements that contribute to value including capital, labor, land, and management.
four unities
Four “unities” are required to create a joint tenancy:- Unity of possession – all joint tenants holding an undivided right to possession.
- Unity of interest – all joint tenants holding equal ownership interests.
- Unity of time – all joint tenants acquiring their interests at the same time.
- Unity of title – all joint tenants acquiring their interests by the same document.
- Title is acquired by one deed.
- The deed is executed and delivered at one time.
- The deed conveys equal interests to all of the parties.
- The parties hold undivided possession of the property as joint tenants.
Four Zero One 401(k) retirement plan
401(k) retirement plans allow an individual to contribute part of their “pre-tax” income to an investment account. Pre-tax contributions are not tax-free, they are tax-deferred, meaning the person does not pay income tax on this money until they withdraw it from the plan (which should be at retirement). Some companies offer to “match” the individual’s contribution as an incentive to join the company’s retirement plan.Depending on the provisions of a company’s retirement plan, a person may take a loan from their 401(k) account, however, not all plans allow for loans. The loan is paid back, plus interest (a fixed rate determined at the time of the loan), through after-tax payroll deductions. As long as the individual repays the loan on time, they are not subject to withholding taxes or penalties.
Fourteenth Amendment to the United States Constitution (1868)
Section 1 is the relevant section of the amendment in this context. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. Constitution of the United States of America
fraction
A portion of a whole number, with the numerator (above-the-line number) of the fraction divided by the denominator (below-the-line number) of the fraction.
fractional basis
Each property in the improvement district is charged a prorated share of the total amount of the special tax assessment. The share is determined either on a fractional basis (four houses may equally share the cost of one streetlight) or on a cost-per-front-foot basis (wider lots incur a greater cost than narrower lots for street paving and curb and sidewalk installation).
Fractional Interests (AZ definition)
An undivided interest in improved or unimproved land, lots or parcels of any size created for the purpose of sale or lease. A good example of a fractional interest is the interest that condominium owners have in the common areas.
fractional section
A parcel of land less than 160 acres, usually found at the edge of a rectangular survey. Undersized or oversized sections are classified as fractional sections. Fractional sections may occur for a number of reasons. In some areas, for instance, the rectangular survey may have been made by separate crews and gaps less than a section wide remained when the surveys met. Other errors may have resulted from the physical difficulties encountered in the actual survey. For example, part of a section may be submerged in water.
frame
Support posts, beams, and roof members, typically wood in residential construction; steel-frame construction is common for commercial structures and is also used for homes.
franchise
1. A privilege granted to conduct certain service businesses, such as a franchise real estate brokerage. 2. The private contractual right to operate a business using a designated trade name and the operating procedures of the parent company (the franchisor). Such firms as Century 21 and Coldwell Banker operate national franchise brokerages.
Franchise Investment Law
Administered by the California corporations commissioner, the law requires disclosure from the franchisor to the franchisee and is intended to protect prospective purchasers of franchises. (See franchise)
franchise tax
An income tax, California corporations pay.
fraud
Any form of deceit, trickery, breach of confidence or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another. Unlike negligence, fraud is a deceitful practice or material misstatement of a material fact, known to be false, and done with intent to deceive, or with reckless indifference as to its truth, and relied on by the injured party to his or her damage.
fraud alert
A “fraud alert” is a statement in a consumer credit report that notifies all prospective users of the report that the consumer may be a victim of fraud, including identity theft.
fraudulent misrepresentation
Misrepresentation with intent to defraud. The person making the statement knew that the statement was false, and made it anyway.
Freddie Mac
Federal Home Loan Mortgage Corporation, commonly known as “Freddie Mac,” is a federally chartered corporation established in 1970 for the purpose of purchasing mortgages in the secondary market. Freddie Mac functions with an independent board of directors but is subject to oversight by HUD.
free trade
An economic concept where restrictions, quotas and tarrifs are removed, and all goods and services can flow between countries in an open competitive market. (See balance of payments, balance of trade)
freehold estate
An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate. (See leasehold estate)
frequency
The number of repetitions of a periodic process in a unit of time.
frequency distribution
The arrangement of data into groups according to the frequency with which they appear in the data set.
friable
The breaking down of a substance into tiny filaments and particles. Asbestos is harmful only if it is disturbed or exposed, as often occurs during renovation or remodeling. Asbestos is highly friable. This means that as it ages, asbestos fibers break down easily into tiny filaments and particles. When these particles become airborne, they pose a risk to humans. (See asbestos)
friable asbestos
Any material containing more than one-percent asbestos, and that can be crumbled or reduced to powder by hand pressure. (See asbestos, friable)
frivolous
Void of significance or reason; of little or no worth, or importance; not worthy of serious notice; trivial; unimportant.
front footage
The measurement of a parcel of land by the number of feet of street or road frontage.
front-end ratio
The ratio of monthly housing cost (PITI) to gross monthly income. (See back-end ratio, PITI)
front-end zero
Under a conventional loan, a borrower may elect to finance all of the mortgage insurance premium, thus incurring no cash obligation for this charge at closing. (See mortgage insurance premium)
frost line
Frost line is how deep the frost permeates the ground. When building codes address frost line or frost depth they are referring to the building code mandate for the depth a foundation must penetrate into the ground.
fructus industriales
Corn, wheat and other crops that are produced annually by labor and industry, and not spontaneously. They are referred to in Latin as “fructus industriales.” (See emblements)
fructus naturales
Fructus naturales are the “natural fruits” of the land where they grow, such as such as timber and wild game. Under common law, fructus naturales are considered part of the real property, and not separate chattels in relation to any legal sale of the property.
frustration of purpose
Frustration of purpose occurs when unexpected events arise which make a contract impossible to be performed, entitling the frustrated party to rescind the contract without paying damages.
full disclosure of material facts
Obligation of real estate licensee to make known to the licensee’s client as well as prospective purchasers all facts concerning the property and likely to affect its value that are known to the licensee and that the licensee is not otherwise prohibited by law from disclosing.
full-time employee
Individuals who work more than 20 hours a week, according to the ADA. (See Americans with Disabilities Act)
fully amortized
Fully amortized mortgages are paid in equal monthly installments, which include interest and amortization of principal, paid over a period of years. The interest is set at a predetermined rate and is charged only on the loan balance. As payments are made, the amount allocated to interest decreases while the amount allocated to principal increases. At the end of the term the mortgage will be paid in full, including interest. No balloon payment is required. (See amortization, balloon payment)
functional obsolescence
A loss of value to an improvement to real estate arising from functional problems, often caused by age or poor design. (See depreciation, economic obsolescense, physical obsolescence)
functional resume
Resume that emphasizes major skills and accomplishments from your complete work history. Unlike the chronological resume, in which the dates, employer, job title, and job tasks are combined together, the functional format organizes the work history into two separate sections: (a) a skills and accomplishments section and (b) a reverse chronological work history describing company, job title and employment dates.
functional utility
1. The ability of a property or building to be useful and to perform the function for which it is intended, according to current market tastes and standards. 2. The efficiency of a building’s use in terms of architectural style, design and layout, traffic patterns, and size and type of rooms. The ultimate test of functional utility is marketability.
funding fee
A percentage of the loan amount charged on VA loans to provide for administrative costs. The fee has increased over time and is higher for subsequent use by veterans, reservists and National Guard.
funding letter
Cover letter prepared by the escrow agent to the lender detailing the documents being forwarded to the lender to complete the borrower’s loan and release the loan proceeds to escrow.
future interest
A person’s present right to an interest in real property that will not result in possession or enjoyment until some time in the future, such as a reversion or right of reentry.
future value (FV)
A value of an amount of money in the future, like $1,000 five years from today.
future worth
The compounding increase in the value of money over time.