Definitions (H)

Real Estate Glossary - Meanings, Terms, & Acronyms

HAZARD INSURANCE
Insurance that covers losses to real estate from damages that might affect its value.

HEIRS
The persons designated in a will, or by operation of law, to succeed to the estate of a deceased person.

HIATUS
A gap unintentionally left when describing two adjacent properties.

HIGH-RATIO LOAN
Mortgage loan with a loan- to-value higher than 80 percent. Calculated using the loan amount divided by the lower of the sales price or appraised value.

HOME EQUITY CONVERSION MORTGAGE (HECM)
Usually referred to as a reverse annuity mortgage, what makes this type of mortgage unique is that instead of making payments to a lender, the lender makes payments to you. It enables older home owners to convert the equity they have in their homes into cash, usually in the form of monthly payments. 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.

HOME EQUITY LINE OF CREDIT
A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.

HOME EQUITY LOAN
A form of closed-end credit secured by a borrower’s home. The borrower receives the full loan amount once, at the beginning of the loan term, and makes monthly payments as required according to the signed contract.

HOME INSPECTION
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.

HOME MORTGAGE DISCLOSURE ACT (HMDA)
Federal legislation that requires certain types of lenders to compile and disclose data on where and to whom their mortgage and home improvement loans are being made.

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.

HOMEOWNERS' ASSOCIATION DUES

The fees imposed by a condominium or homeowners' association for maintenance of common areas.

HOMEOWNER'S WARRANTY
A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.

HOMEOWNER’S INSURANCE

Coverage that includes personal liability and theft insurance in addition to hazard insurance.

HOME VALUATION CODE OF CONDUCT (HVCC)

The Home Valuation Code of Conduct establishes standards for solicitation, selection, compensation, conflicts of interest, and appraiser independence. It became effective May 1, 2009, for any mortgage that will be sold to Fannie Mae or Freddie Mac; Federal Housing Administration (FHA) and Federal Home Loan Bank (FHLB) mortgages are not covered in the agreement.

HOUSEHOLD
All persons routinely living in the dwelling as principal residence, except for live‐in aides, foster children, and foster adults.

HOUSING EXPENSE RATIO

The relationship of a borrower's monthly housing payment (PITI and other housing expenses), divided by the borrower’s gross monthly income, expressed as a percentage. Also called the “top ratio.”

HOUSING COUNSELING CLEARINGHOUSE (HCC)

A HUD‐established service for financially distressed mortgagors to call (1‐800‐569‐4287) for information on HUD‐approved housing counseling agencies. Required by the HUD Act of 1968, lenders must notify all eligible delinquent borrowers of the availability of housing counseling for residential mortgage loans, whether conventional, government insured or government guaranteed, including loans, direct or insured, by Federal, State and local governmental agencies.

HUD
U.S. Department of Housing and Urban Development.

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/RESPA (HOUSING AND URBAN DEVELOPMENT/REAL ESTATE SETTLEMENT PROCEDURES ACT)
A document and statement that details all of the monies paid out and received at a real estate property closing.

HUD-1 SETTLEMENT STATEMENT
A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow (impound) amounts. Each type of expense goes on a specific numbered line on the sheet. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing. It is called a HUD1 because the form is printed by the Department of Housing and Urban Development (HUD). The HUD1 statement is also known as the "closing statement" or "settlement sheet."

HYBRID ADJUSTABLE RATE

Offers a fixed rate the first 5 years and then adjusts annually for the next 25 years.