Insurance coverage that compensates for physical damage
to a property from fire, wind, vandalism, or other
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
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 elements.
An insurance policy that combines personal liability
insurance and hazard insurance coverage for a dwelling
and its contents.
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.
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
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