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Federal Housing Administration (FHA)

A government agency that provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA loans are a popular option for first-time homebuyers or those with lower credit scores.

Non-performing loan

A loan where the borrower has not made scheduled payments for a significant period (e.g., 90 days or more) and is considered to be in default. This indicates the borrower is struggling financially.

Loss mitigation

Actions taken by a mortgage lender to help a borrower avoid foreclosure. This can include options like loan modifications (changing loan terms), forbearance (temporarily pausing payments), or partial claims (a one-time payment to bring the loan current).

Forbearance

A temporary pause or reduction in mortgage payments, usually granted by the lender during a period of financial hardship. Interest still accrues, and the missed payments typically need to be repaid later.

Contract for deed

An agreement where the buyer makes payments directly to the seller over time, but the seller retains legal title to the property until the full purchase price is paid. This is often used by buyers who can't get traditional mortgages but carries higher risks for the buyer.

Area median income (AMI)

The midpoint of a region's income distribution, meaning half of the households in that region earn more than the median, and half earn less. It is often used to determine eligibility for affordable housing programs.