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 | #

Select the first letter of the word from the list above to jump to appropriate section of the glossary. If the term you are looking for starts with a digit or symbol, choose the '#' link.

- A -

Appraisal
 

An estimate of the value of property, made by a qualified professional called an appraiser.

- B -

Below-Market Interest Rate

An interest rate offered to borrowers that is lower than the rate they could obtain from a mortgage lender, bank, savings & loan institution, etc. The reduced rate lowers the borrower's monthly mortgage payment.

- C -

Closing Costs

In addition to the mortgage amount and a down payment, the borrower will incur costs and fees needed to close the loan. These costs may include an origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge, and other related fees. Closing costs are normally estimated to be 3% to 6% of the mortgage amount.

Conventional Loan

A mortgage not insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veteran's Affairs (VA) or Rural Development (RD).

- D -

Down Payment

Money paid to make up the difference between the purchase price and mortgage amount.

- E -

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- F -

Federal Housing Administration (FHA)

A division of the U.S. Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.

First-Time Home Buyer

A borrower who has not had an ownership interest in their primary residence in the last three years preceding the loan closing date.

Fixed Interest Rate

The fee charged for borrowing money, usually expressed as a percentage of the amount borrowed. Since the interest rate is "fixed" it means that the loan payment (principal & interest only) will remain the same over the entire term of the loan.

- G -

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- H -

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- I -

Industrial Development Bonds

Federally tax-exempt obligations issued by state or local governments to finance non-governmental activities. Also known as "private activity bonds."

Interest

The fee charged for borrowing money, usually expressed as a percentage of the amount borrowed.

- J -

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- K -

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- L -

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- M -

Mortgage Credit Certificate

A certificate issued to the borrower which allows him/her to receive a federal tax credit of 25% on the amount of interest that he/she pays on their mortgage on an annual basis. The MCC should be kept in a safe place as it will be needed for tax purposes as long as the borrower lives in the home and is still paying interest on their mortgage loan.

Mortgage Loan

The legal agreement where a borrower is obligated to repay a lender for money borrowed to purchase a home.

- N -

Non-Targeted Area

All areas in the state of Iowa, excluding targeted areas.

- O -

Origination Fee

A fee charged by the lender for taking an application and processing a mortgage loan. The fee is usually computed as a percentage of the loan amount.

- P -

Participating Lender

A bank, savings and loan association, mortgage group, credit union or other lending institution authorized to accept and process applications for IFA's programs.

Points

Pre-paid interest assessed at closing by the lender.

Primary Residence

A residence occupied, or intended to be occupied, by a buyer as his/her home. The residence can not be an investment property, recreational home or primary place of trade or business.

Program Administrator

An organization hired by the Iowa Finance Authority to administer one or more programs.

Purchase Price

The amount the borrower paid to purchase a home.

- Q -

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- R -

Rural Development (RD)

A division of the U.S. Department of Agriculture which provides financing to farmers and other qualified borrowers in rural areas who may not be able to obtain financing elsewhere.

The USDA Rural Housing Service has various programs available to aid in the development of rural America. Rural Housing programs are divided into three categories: Community Facilities (CF), Single Family Housing (SFH), and Multi-Family Housing (MFH). These programs were formerly operated by the Rural Development Administration and the Farmers Home Administration.

- S -

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- T -

Targeted Area

Areas in the state of Iowa that are designated as being in economic distress. To encourage growth and revitalization in these areas, IFA's programs guidelines are less stringent for borrowers purchasing a home in one of these areas. Contact a participating lender for targeted area locations.

Tax-Exempt

Not subject to state and/or federal taxes.

Title

A document that gives evidence of an individual's ownership of property.

Title Guaranty Certificate

A document issued y IFA's Title Guaranty Division which insures a real estate owner or lender against a loss of interest due to flaws in the previous ownership of property.

- U -

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- V -

Veterans Administration (VA) Loan

A long-term, low or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.

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- X -

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- Y -

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