The façade of a building is its exterior front wall, often the primary architectural expression and an important feature influencing both aesthetics and functional aspects of the structure.
A façade easement is a legal agreement that ensures the preservation of the exterior façade of a historic building, while allowing the owner to modify other exterior walls and the interior.
Face amount refers to the nominal value or dollar value of a security stated by the issuer. For bonds, it is the principal amount paid back to the bondholder at maturity. For insurance policies, it represents the amount payable to the beneficiary upon the death of the insured.
The face interest rate is the percentage interest specified on the loan documents, representing the nominal annual interest rate before accounting for additional fees or compounding periods. This term is often compared with the Annual Percentage Rate (APR) and the Effective Rate.
Face value refers to the nominal or dollar value stated on financial instruments, such as bonds, stocks, or mortgages. It is a fixed amount, unaffected by fluctuating market prices.
Facilities management involves the processes and services that support the core business operations of an organization, ensuring that the environment is managed effectively and efficiently.
Factors of production are inputs used in the creation of goods and services in order to make an economic profit. They include land, labor, capital, and entrepreneurship.
A general category of housing produced largely in a factory. This umbrella term encompasses MANUFACTURED HOMES, MODULAR HOMES, and PREFABRICATED HOMES, offering significant cost savings and efficient construction techniques compared to traditional site-built homes.
The Fair Credit Reporting Act (FCRA) is a federal law that promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. The Act allows individuals to examine, correct, and challenge the information reported by these agencies.
The Fair Housing Law encompasses regulations and statutes that prohibit discrimination in housing-related transactions based on race, color, religion, sex, familial status, national origin, and disability.
Fair Market Rent (FMR) is the amount a property would command if it were available for lease on the open market, reflecting current rental market conditions. FMR is often used in determining rent subsidies under government programs and provides a benchmark for rental prices in a given area.
Fair market value (FMV) is a critical concept in real estate, representing the estimated price at which a property would sell in the open market under normal circumstances. It is commonly used in property tax assessments, sales valuations, and condemnation proceedings.
Fair Market Value (FMV) is the price that a property would sell for on the open market. Calculating FMV helps in real estate transactions, taxation, litigation, and insurance claims.
Fair value is a measure used for the estimation of the market value of assets and liabilities based on orderly transactions between market participants. This valuation concept is essential in accounting to maintain proper financial statements and balance sheets according to standard principles.
False advertising in real estate involves representing a property in a misleading or deceitful manner, resulting in potential buyers or renters making decisions based on inaccurate information.
Familial status is a characteristic derived from a person's household type, including factors such as marriage and the presence of existing or prospective children. It is crucial in the realm of housing rights as outlined by the Federal Fair Housing Law and the Fair Credit Reporting Act. These laws prohibit discrimination against individuals under the age of 18 who reside with a parent or legal guardian, and they provide specific coverage for pregnant women.
A family in real estate terms refers to a household consisting of two or more related people, typically living together. Understanding the definition and dynamics of a family is crucial in demographics, housing statistics, and the formulation of housing policies.
A Family Limited Partnership (FLP) is a limited partnership whose interests are owned by members of the same family. This structure can help reduce gift and estate taxes but comes with restrictions on ownership and transferability, unlike other ownership forms.
Fannie Mae (FNMA) is a government-sponsored enterprise (GSE) that backs and increases liquidity in the United States residential mortgage market by buying and guaranteeing mortgage loans.
Fannie Mae Form 1004 and Form 2055 are standard appraisal forms utilized by appraisers to report the appraised value of residential properties.
The Farm Service Agency (FSA) is a federal agency under the U.S. Department of Agriculture that provides mortgage loans to rural property owners, including farmers and service providers to farmers and ranchers. These loans are typically issued at below-market interest rates and require borrowers to purchase stock in their local land bank association for additional security.
Farmer Mac, officially known as the Federal Agricultural Mortgage Corporation, is a government-sponsored enterprise (GSE) established to improve the availability of mortgage credit in rural America, encourage rural economic development, and ensure competitive and reliable prices for agricultural loans.
Farmers Home Administration (FmHA) was a former agency of the U.S. Department of Agriculture that administered assistance programs for the purchasers of homes and farms in small towns and rural areas. In 1994, the USDA reorganized and transferred the functions of the FmHA to the Farm Service Agency.
Farming in real estate refers to a targeted marketing strategy where an agent or broker focuses on a specific geographic area to cultivate a steady stream of clients, similar to a farmer tending to crops. This marketing plan involves detailed, concentrated efforts in a defined market area.
A feasibility study is a detailed analysis aiming to determine the viability, risks, and profitability of a proposed real estate development, ensuring that the project fulfills investors' objectives and aligns with market demand.
The Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, was established to provide a secondary market for agricultural loans. This organization helps enhance the availability, affordability, and negotiation flexibility for long-term funding for agricultural operations by purchasing and pooling loans from local lenders.
The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency that provides deposit insurance to depositors in American commercial banks and savings institutions, ensuring the stability and public confidence in the nation's financial system.
A public corporation established in 1933; insures up to $250,000 for each depositor in each commercial bank and savings and loan association. It has its own reserves and can borrow from the U.S. Treasury.
The Federal Emergency Management Agency (FEMA) is a U.S. government agency responsible for coordinating the federal government's response to natural and man-made disasters, including providing financial assistance for disaster recovery and managing the National Flood Insurance Program (NFIP).
The Federal Fair Housing Act is a federal law that prohibits discrimination in the rental, buying, or financing of homes and apartments on the basis of race, color, sex, religion, handicap, familial status, or national origin.
The Federal Home Loan Bank System (FHLBank System) is federally created to ensure liquidity for qualified thrift lenders, aiming to support housing finance and community development.
The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a government-sponsored enterprise (GSE) that helps provide liquidity, stability, and affordability to the mortgage market in the United States.
The Federal Housing Administration, or FHA, is a U.S. government agency within the Department of Housing and Urban Development that administers various loan programs, loan guarantees, and loan insurance programs designed to make homeownership more accessible.
The Federal Housing Finance Agency (FHFA) is a U.S. government agency established in 2008 under the Housing and Economic Recovery Act to replace the Federal Housing Finance Board and oversee the Federal Home Loan Bank System, which includes housing-related Government-Sponsored Enterprises (GSEs) such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
Federal Land Banks are specialized, government-sponsored lenders under the Federal Farm Credit System that provide loans for purchasing, refinancing, and renovating rural real estate, aiming to alleviate the shortage of real estate credit in non-urban areas.
Commonly known as Fannie Mae, FNMA is a government-sponsored enterprise that expands the secondary mortgage market by securitizing mortgage loans, thus providing lenders with liquidity and facilitating homeownership in the United States.
A daily bulletin published by the U.S. government that provides a record of federal actions. It typically includes executive orders, new federal regulations, and certain other documents related to various sectors including real estate.
The central federal banking system that regulates and provides services to member commercial banks, and is responsible for conducting federal monetary policy.
Federal Revenue Stamps are adhesive stamps that, when affixed to a transaction document, indicate the payment of a federal tax imposed upon the transaction. These have not been required since 1968.
The Federal Rule is a method utilized in determining just compensation for property seized through condemnation. This rule is specifically applied in federal condemnation cases and various state cases. It is often referred to as the 'before and after' rule, representing the value difference of the property before and after the taking to determine fair compensation.
Federal subsidy recapture refers to the required repayment of a federal subsidy received on a mortgage loan if the property is sold or disposed of within a specified period, typically nine years.
A federal tax lien is a legal claim by the government against a property when the owner fails to pay federal taxes. This debt attachment ensures the government has first priority on any proceeds from the sale of the property.
The Federal Trade Commission (FTC) is a federal agency that regulates advertising and other promotion and sales practices of firms engaged in interstate commerce.
The Federal Trade Commission (FTC) is an independent agency of the United States government established in 1914, aimed at promoting consumer protection and eliminating and preventing anticompetitive business practices.
A Federal-style house is an early American architecture type characterized by its box-shaped design and a flat roof, often incorporating classic design elements such as symmetrical fenestration and decorative moldings.
A Federally Related Mortgage is a mortgage loan that is governed by federal laws and regulations due to involvement by federal agencies, ensuring compliance and protection for both lenders and borrowers.
A federally related transaction refers to a real estate transaction that is governed and regulated by federal agencies such as the Federal Reserve Board, FDIC, OCC, OTS, NCUA, Fannie Mae, Freddie Mac, FHA, and the Department of Veterans Affairs. For the transaction to be valid, it necessitates real estate appraisal conducted by state-licensed or certified appraisers.
A fee in real estate can refer to the ownership interest in land that may be inherited, known as a fee simple or fee simple defeasible, or it can refer to compensation based on the completion of a specific task.
A Fee Appraiser, also known as an Independent Fee Appraiser, is a professional who provides an objective evaluation of a property's market value based on current market conditions. This unbiased assessment is crucial for various real estate transactions and financing activities.
Fee Simple or Fee Simple Absolute refers to the absolute ownership of real property where the owner is entitled to the entire property with unconditional power of disposition during the owner's life, and upon their death, the property descends to the owner's designated heirs.
Fee Simple Defeasible refers to a type of property ownership where the grant of title or duration of ownership is dependent on a specified condition.
Fee Simple Value refers to the market value of a property assuming it is owned outright, free of any leases or mortgages. It provides an estimate of the highest value that a property could achieve in an open market without any encumbrances.
FEMA, the Federal Emergency Management Agency, is responsible for coordinating the federal government’s response to natural and man-made disasters, ensuring effective preparation, response, recovery, and mitigation efforts to safeguard people and properties.
Feng Shui, pronounced 'fung shway,' is an ancient Asian art that involves arranging your environment and using color to create harmony and balance within a living space. This practice centers on achieving spatial equilibrium through specific design principles.
FF&E stands for Furniture, Fixtures, and Equipment, encompassing all movable property that is used in business operations and can include everything from chairs and desks to lighting and cabinetry.
The Federal Housing Administration (FHA) is a United States government agency that provides mortgage insurance on loans made by FHA-approved lenders. It aims to make homeownership more accessible, especially for first-time homebuyers, by reducing the risk for lenders and arranging easier borrowing terms for borrowers.
The FHA 203(b) program provides mortgage insurance to lenders to protect against borrower default and is commonly used to finance the purchase of new or existing one- to four-family housing.
The FHA 203(K) program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan.
The FHA 235 program provides an interest-rate subsidy for lower-income families to become homeowners by reducing the required monthly mortgage payments through government assistance.
The FHA 236 program provides an interest-rate subsidy for apartment owners, who are required to pass the interest savings on to tenants through reduced rents.
An FHA Mortgage Loan is a mortgage loan insured by the Federal Housing Administration (FHA), designed to help lower and moderate-income individuals qualify for homeownership. This type of loan allows borrowers to make a lower down payment and can be more lenient on credit scores compared to conventional loans.
The Office of Fair Housing and Equal Opportunity (FHEO) enforces federal laws and establishes policies that ensure all Americans have equal access to the housing of their choice.
The FHFA House Price Index (HPI) is a home price index compiled by the Federal Housing Finance Agency, based on data from loans held by home mortgage GSEs. It provides values for each state and metropolitan area in the United States.
The Federal Home Loan Bank System (FHLB) is a group of regional banks across the United States that provide financial products and services to help local lenders provide housing finance, economic development, and community investment.
FIABCI (Fédération Internationale des Administrateurs de Biens Conseils Immobiliers) is the French acronym for the International Real Estate Federation, a global network of real estate professionals that provides education and advocacy for its members.
FICO scores measure borrower credit risk and are commonly used by mortgage underwriters when originating loans on owner-occupied homes. The score is based on the applicant’s credit history and credit usage patterns, expressed as a number between 300 and 850. This score determines loan approval and terms offered.
A type of insurance purchased by an employer to protect against financial loss due to dishonest acts committed by employees who handle valuable property or funds.
A fiduciary is a person or organization that acts, in a legal role, in the best interests of another party such as a broker, banker, attorney, or trustee.
A fifteen-year mortgage is a fixed-rate, level-payment mortgage loan with a maturity of 15 years, often chosen for its interest savings and quicker equity buildup compared to longer-term loans.
Filing fees are charges associated with documents that are recorded in the courthouse in connection with a sale, including deed-recording, mortgage-recording, and mortgage-release charges.
Filtering Down is the process whereby over time, a housing unit or neighborhood is occupied by progressively lower-income residents.
A Final Plat is a detailed map that provides the specific boundaries of each lot and utility easements in a subdivision, suitable for public recording. It marks the transition from conceptual planning to legally recognized property descriptions.
The final value estimate is the appraiser’s concluded value of a real estate property, determined after reconciling values from different appraisal approaches such as cost, sales comparison, and income.
A finance charge is an interest or a certain other fees charged to a credit customer. It is a cost imposed for borrowing or the service of advancing credit.
A clause or addendum to an agreement of sale that stipulates conditions for financing the property that must be met for the buyer to be obligated to close the sale.
Financial Accounting Standards Board (FASB) 141 outlines the principles for recognizing and measuring assets and liabilities acquired in a business combination. This standard ensures accurate financial reporting for mergers and acquisitions within Generally Accepted Accounting Principles (GAAP).
Financial feasibility assesses whether a proposed land use or change in land use can economically justify itself. This evaluation is a crucial aspect of determining the highest and best use of the land but does not alone determine the optimal land use.
A financial institution is a company whose 'product' involves money, such as making loans, investments, and accepting deposits. These institutions are fundamental to the functioning of the financial system and economy.
A federal law enacted in 1989 aimed at restructuring the regulatory framework for savings and loan associations, improving deposit insurance, and addressing systemic issues within the financial sector to mitigate the impact of future crises.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) was enacted in response to the Savings and Loan (S&L) crisis, aiming to restructure the regulatory framework and revitalize the financial industry.
A Financial Intermediary is an institution that acts as a middleman between savers and borrowers, collecting deposits and channeling them into investments such as loans and securities.
Financial leverage refers to the use of borrowed funds to increase an investment's potential return. While it can amplify returns, it simultaneously increases the risk of loss.
A financial metric that adjusts the Internal Rate of Return (IRR) by considering practical aspects such as the cost of funds and returns from interim investments.
The Financial Obligation Ratio (FOR) is a metric compiled and reported by the Federal Reserve Board that tracks the household financial burden for the United States. The ratio represents the percentage of disposable income used for debt payments, including property taxes, insurance premiums, lease payments, and mortgage and credit card debt payments.
Financial risk refers to the increased potential for volatility in investment performance created by the use of borrowed money. This concept is closely tied to leverage and equity investment, impacting the overall financial stability of an investment.
A financial statement is a formal record of the financial activities and position of a business, person, or other entity, revealing the income, expenses, assets, liabilities, and equity.
Financing is the process of borrowing money to purchase property. Various methods exist to acquire the necessary funds, which can involve different types of loans and arrangements.
Financing expenses refer to the costs associated with borrowing funds to acquire real estate assets, including interest on loans and ground rent. It is distinct from operating expenses, which are related to the day-to-day operations of the property.
A finder's fee refers to money paid to an individual who identifies or connects a buyer and seller or lender and borrower, facilitating a transaction. While finder's fees are permissible in certain jurisdictions under specific conditions, they cannot be substantial and get mistaken for a broker's commission.
A provision in a lease for an office or retail space that provides a certain sum or amount per square foot to the tenant to customize the space.
A Finished Lot refers to a parcel of land that has been prepared for immediate construction with essential infrastructure, legal clearances, and utilities in place.
Fire insurance is a type of property insurance that covers damage and losses caused by fire. It is typically part of a broader homeowner’s insurance policy and is essential for protecting real estate investments against fire-related incidents.
A fire stop is a construction feature designed to prevent the spread of fire throughout a structure. It typically involves barriers made from fireproof materials, often interspersed within walls and floors to compartmentalize sections of a building, enhancing fire safety and containment.
Materials, construction elements, and designs specified to withstand exposure to flames for a defined period, contributing to enhanced safety and containment during a fire.
Fireproof construction refers to the use of materials that have a high degree of resistance to fire, thereby reducing the risk of damage or destruction due to fire. These materials can either be noncombustible or protected by other noncombustible materials.
A firm commitment is an irrevocable agreement in which one party commits to performing a specific act, typically in the context of lending, ensuring that financing will be provided under predefined terms.
A first mortgage, also known as a senior mortgage, is a mortgage that has priority as a lien over all other mortgages and is satisfied first in cases of foreclosure.
The First Refusal Right, also known as Right of First Refusal (ROFR), grants the holder the opportunity to enter a transaction—such as purchasing or leasing property—before the owner can enter into a similar transaction with a third party.
First-Time Home Buyers are individuals or households entering the real estate market to purchase a home for the first time or after an extended period of renting. Various programs and incentives often exist to assist these buyers, particularly those who meet specific criteria such as income limits.
First-Year Depreciation allows property owners to take a larger depreciation deduction in the first year than what is typically provided under regular depreciation schedules, thereby accelerating tax benefits.
