hazard
insurance
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.
home inspection
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.
HomeKeeperSM
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.
homeowners' association
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.
homeowner's insurance
An insurance policy that combines personal liability insurance and
hazard insurance coverage for a dwelling and its contents.
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.
HomeStyle®
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).
HUD-1 statement
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 "settlement sheet."
