Definitions
Adjusted Gross Income – Gross income adjusted by standard deductions set by federal guidelines.
Adjustable Rate Mortgage (ARM) – a mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender.
Affordable Housing – Housing that costs no more than 30 percent of a household’s annual income.
Appraisal – A written report from a certified appraiser estimating the value of a property.
Area Median Income – The median divides the household income distribution into two equal parts. One-half of the incomes above the median household income and one-half falling below the median. Used to determine eligibility in a variety of housing programs.
Brownfields – Real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous pollutant, substance or contaminant.
Community Development Block Grant Program (CDBG) – A Federal program created under the Housing and Community Development Act of 1974. This program provides grants funds to local and State governments to be used to develop viable urban communities by providing decent housing with a suitable living environment and expanding economic opportunities to assist low- and moderate-income residents.
Condominium – Single, individually owned housing unit in a multiple-unit building. The owner holds legal title to the unit and pays property taxes plus a share of the building’s charges for maintenance and upkeep of common areas. The owner may sell, rent, or mortgage the unit just as if it were a single-family house.
Consolidated Plan – A document written by a State or local government describing the housing needs of the low- and moderate-income residents, outlining strategies to meet the needs and listing all resources available to implement the strategies. This document is required to receive HUD Community Planning and Development funds.
Fair Housing – Federal law that makes discrimination based on race, color, religion, sex, national origin, family status, or disability illegal when trying to buy or rent a home.
Fair Housing Act – Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).
Federal Housing Administration (FHA) – An insuring entity providing mortgage insurance on loans made by FHA approved lenders throughout the United States. FHA insures single family, multi-family, and manufactured homes and is administered by the Assistant Secretary for Housing.
Fixed Rate Mortgage – A mortgage payment that remains the same throughout the life of the loan since the interest rate is fixed and does not change.
Good Neighbor Next Door – Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.
Government National Mortgage Association – Also known as Ginnie Mae; major departmental organization responsible for providing mortgage lenders a better price for their mortgage loans in the secondary market. The lenders are then able to use the proceeds to make new mortgage loans available.
Gross Income – Total income before deductions, adjustments or exemptions.
Home Mortgage Disclosure Act (HMDA) – The Home Mortgage Disclosure Act of 1975 requires most mortgage lending institutions to maintain and disclose information about their lending practices. HMDA data continues to include racial and ethnic identifiers, the location of the loan by census tract and the amount of the loan.
HUD – U.S. Department of Housing and Urban Development; An agency of the federal government established to provide affordable housing and promote economic development.
Impact Fee – A charge on new development for the construction or expansion of off-site capital improvements that must be built or increased due to new property development. These improvements include water and sewer systems, police and fire protection, schools and libraries.
Mixed Income Housing – A development that is comprised of housing units with differing levels of affordability, typically including market-rate housing and some housing that is available below market rate.
Mixed Use Development – A development that maximizes available land by combining commercial, retail and residential uses.
Moderate Income – Annual household income ranging between 80 percent and 120 percent of the area median income (AMI).
Mortgage Insurance – A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Mortgage insurance is required primarily for borrowers with a down payment of less than 20 percent of the homes purchase price.
NIMBYism – Not In My Back Yard; the opposition of residents to nearby projects that they consider undesirable, even though it may benefit the community as a whole.
PITI Ratio – The amount paid by the borrower for principal, interest, insurance and taxes, divided by repayment income.
Private Mortgage Insurance (PMI) – Privately owned companies that offer mortgage insurance programs, that protects a lender against loss if the borrower defaults, for qualified borrowers with down payments of less than 20 percent of the purchase price.
Rehabilitation Mortgage – A mortgage that covers the costs of rehabilitating (improving or repairing) a property.
Total Debt Ratio – The amount paid by the borrower for principal, interest, insurance and taxes and any recurring monthly debt, divided by repayment income.
Workforce Housing – Attainable housing to those within the local workforce whose household income equals 60 percent to 110 percent of the Area Median Income.