(a) Statutory terms. All terms defined in the Safety and Soundness Act are used in accordance with their statutory meaning unless otherwise defined in paragraph (b) of this section.
(b) Other terms. As used in this part, the term:
AHAR means the Annual Housing Activities Report that an Enterprise submits to the Director under section 309(n) of the Fannie Mae Charter Act or section 307(f) of the Freddie Mac Act.
AHAR information means data or information contained in the AHAR.
AHS means the American Housing Survey published by HUD and the Department of Commerce.
Balloon mortgage means a mortgage providing for payments at regular intervals, with a final payment (``balloon payment'') that is at least 5 percent more than the periodic payments. The periodic payments may cover some or all of the periodic principal or interest. Typically, the periodic payments are level monthly payments that would fully amortize the mortgage over a stated term and the balloon payment is a single payment due after a specified period (but before the mortgage would fully amortize) and pays off or satisfies the outstanding balance of the mortgage.
Borrower income means the total gross income relied on in making the credit decision.
Charter Act means the Fannie Mae Charter Act, as amended, or the Freddie Mac Act, as amended.
Contract rent means the total rent that is, or is anticipated to be, specified in the rental contract as payable by the tenant to the owner for rental of a dwelling unit, including fees or charges for management and maintenance services and those utility charges that are included in the rental contract. In determining contract rent, rent concessions shall not be considered, i.e., contract rent is not decreased by any rent concessions. Contract rent is rent net of rental subsidies. Anticipated rent for unoccupied units may be the market rent for similar units in the neighborhood as determined by the lender or appraiser for underwriting purposes.
Conventional mortgage means a mortgage other than a mortgage as to which an Enterprise has the benefit of any guaranty, insurance or other obligation by the United States or any of its agencies or instrumentalities.
Day means a calendar day.
Designated disaster area means any census tract that is located in a county designated by the federal government as adversely affected by a declared major disaster administered by FEMA, where individual assistance payments were authorized by FEMA. A census tract shall be treated as a ``designated disaster area'' for purposes of this part beginning on the January 1 after the FEMA designation of the county, or such earlier date as determined by FHFA, and continuing through December 31 of the third full calendar year following the FEMA designation. This time period may be adjusted for a particular disaster area by notice from FHFA to the Enterprises.
Dwelling unit means a room or unified combination of rooms intended for use, in whole or in part, as a dwelling by one or more persons, and includes a dwelling unit in a single-family property, multifamily property, or other residential or mixed-use property.
Extremely low-income means:
(i) In the case of owner-occupied units, income not in excess of 30 percent of area median income; and
(ii) In the case of rental units, income not in excess of 30 percent of area median income, with adjustments for smaller and larger families in accordance with this part.
Families in low-income areas means:
(i) Any family that resides in a census tract or block numbering area in which the median income does not exceed 80 percent of the area median income;
(ii) Any family with an income that does not exceed area median income that resides in a minority census tract; and
(iii) Any family with an income that does not exceed area median income that resides in a designated disaster area.
Family means one or more individuals who occupy the same dwelling unit.
Fannie Mae Charter Act means the Federal National Mortgage Association Charter Act, as amended (12 U.S.C. 1715 et seq.).
FEMA means the Federal Emergency Management Agency.
FOIA means the Freedom of Information Act, as amended (5 U.S.C. 552).
Freddie Mac Act means the Federal Home Loan Mortgage Corporation Act, as amended (12 U.S.C. 1451 et seq.).
HMDA means the Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.).
HOEPA mortgage means a mortgage covered by section 103(aa) of the Home Ownership and Equity Protection Act (HOEPA) (15 U.S.C. 1602(aa)), as implemented by the Board of Governors of the Federal Reserve System.
HUD means the United States Department of Housing and Urban Development.
Lender means any entity that makes, originates, sells, or services mortgages, and includes the secured creditors named in the debt obligation and document creating the mortgage.
Low-income means:
(i) In the case of owner-occupied units, income not in excess of 80 percent of area median income; and
(ii) In the case of rental units, income not in excess of 80 percent of area median income, with adjustments for smaller and larger families in accordance with this part.
Median income means, with respect to an area, the unadjusted median family income for the area as most recently determined by HUD. FHFA will provide the Enterprises annually with information specifying how the median family income estimates for metropolitan areas are to be applied for the purposes of determining median family income.
Metropolitan area means a metropolitan statistical area (MSA), or a portion of such an area, including Metropolitan Divisions, for which median family income estimates are determined by HUD.
Minority means any individual who is included within any one or more of the following racial and ethnic categories:
(i) American Indian or Alaskan Native--a person having origins in any of the original peoples of North and South America (including Central America), and who maintains Tribal affiliation or community attachment;
(ii) Asian--a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam;
(iii) Black or African American--a person having origins in any of the black racial groups of Africa;
(iv) Hispanic or Latino--a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race; and
(v) Native Hawaiian or Other Pacific Islander--a person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
Minority census tract means a census tract that has a minority population of at least 30 percent and a median income of less than 100 percent of the area median income.
Moderate-income means:
(i) In the case of owner-occupied units, income not in excess of area median income; and
(ii) In the case of rental units, income not in excess of area median income, with adjustments for smaller and larger families in accordance with this part.
Mortgage means a member of such classes of liens, including subordinate liens, as are commonly given or are legally effective to secure advances on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby, and includes interests in mortgages. ``Mortgage'' includes a mortgage, lien, including a subordinate lien, or other security interest on the stock or membership certificate issued to a tenant-stockholder or resident-member by a cooperative housing corporation, as defined in section 216 of the Internal Revenue Code of 1986, and on the proprietary lease, occupancy agreement, or right of tenancy in the dwelling unit of the tenant-stockholder or resident-member in such cooperative housing corporation.
Mortgage data means data obtained by the Director from the Enterprises under section 309(m) of the Fannie Mae Charter Act and section 307(e) of the Freddie Mac Act.
Mortgage purchase means a transaction in which an Enterprise bought or otherwise acquired a mortgage or an interest in a mortgage for portfolio, resale, or securitization.
Mortgage revenue bond means a tax-exempt bond or taxable bond issued by a State or local government or agency where the proceeds from the bond issue are used to finance residential housing.
Mortgage with unacceptable terms or conditions means a single-family mortgage, including a reverse mortgage, or a group or category of such mortgages, with one or more of the following terms or conditions:
(i) Excessive fees, where the total points and fees charged to a borrower exceed the greater of 5 percent of the loan amount or a maximum dollar amount of $1000, or an alternative amount requested by an Enterprise and determined by the Director as appropriate for small mortgages.
(A) For purposes of this definition, points and fees include:
(1) Origination fees;
(2) Underwriting fees;
(3) Broker fees;
(4) Finder's fees; and
(5) Charges that the lender imposes as a condition of making the loan, whether they are paid to the lender or a third party;
(B) For purposes of this definition, points and fees do not include:
(1) Bona fide discount points;
(2) Fees paid for actual services rendered in connection with the origination of the mortgage, such as attorneys' fees, notary's fees, and fees paid for property appraisals, credit reports, surveys, title examinations and extracts, flood and tax certifications, and home inspections;
(3) The cost of mortgage insurance or credit-risk price adjustments;
(4) The costs of title, hazard, and flood insurance policies;
(5) State and local transfer taxes or fees;
(6) Escrow deposits for the future payment of taxes and insurance premiums; and
(7) Other miscellaneous fees and charges that, in total, do not exceed 0.25 percent of the loan amount;
(ii) An annual percentage rate that exceeds by more than 8 percentage points the yield on Treasury securities with comparable maturities as of the fifteenth day of the month immediately preceding the month in which the application for the extension of credit was received;
(iii) Prepayment penalties, except where:
(A) The mortgage provides some benefit to the borrower (e.g., a rate or fee reduction for accepting the prepayment premium);
(B) The borrower is offered the choice of another mortgage that does not contain payment of such a premium;
(C) The terms of the mortgage provision containing the prepayment penalty are adequately disclosed to the borrower; and
(D) The prepayment penalty is not charged when the mortgage debt is accelerated as the result of the borrower's default in making his or her mortgage payments;
(iv) The sale or financing of prepaid single-premium credit life insurance products in connection with the origination of the mortgage;
(v) Underwriting practices contrary to the Interagency Guidance on Nontraditional Mortgage Product Risks (71 FR 58609) (Oct. 4, 2006), the Interagency Statement on Subprime Mortgage Lending (72 FR 37569) (July 10, 2007), or similar guidance subsequently issued by Federal banking agencies;
(vi) Failure to comply with fair lending requirements; or
(vii) Other terms or conditions that are determined by the Director to be an unacceptable term or condition of a mortgage.
Multifamily housing means a residence consisting of more than four dwelling units. The term includes cooperative buildings and condominium projects.
Non-metropolitan area means a county, or a portion of a county, including those counties that comprise Micropolitan Statistical Areas, located outside any metropolitan area for which median family income estimates are published annually by HUD.
Owner-occupied housing means single-family housing in which a mortgagor resides, including two- to four-unit owner-occupied properties where one or more units are used for rental purposes.
Participation means a fractional interest in the principal amount of a mortgage.
Private label security means any mortgage-backed security that is neither issued nor guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae, or any other government agency.
Proprietary information means all mortgage data and all AHAR information that the Enterprises submit to the Director in the AHARs that contain trade secrets or privileged or confidential, commercial, or financial information that, if released, would be likely to cause substantial competitive harm.
Public data means all mortgage data and all AHAR information that the Enterprises submit to the Director in the AHARs that the Director determines are not proprietary and may appropriately be disclosed consistent with other applicable laws and regulations.
Purchase money mortgage means a mortgage given to secure a loan used for the purchase of a single-family residential property.
Refinancing mortgage means a mortgage undertaken by a borrower that satisfies or replaces an existing mortgage of such borrower. The term does not include:
(i) A renewal of a single payment obligation with no change in the original terms;
(ii) A reduction in the annual percentage rate of the mortgage as computed under the Truth in Lending Act (15 U.S.C. 1601 et seq.), with a corresponding change in the payment schedule;
(iii) An agreement involving a court proceeding;
(iv) A workout agreement, in which a change in the payment schedule or collateral requirements is agreed to as a result of the mortgagor's default or delinquency, unless the rate is increased or the new amount financed exceeds the unpaid balance plus earned finance charges and premiums for the continuation of insurance;
(v) The renewal of optional insurance purchased by the mortgagor and added to an existing mortgage;
(vi) A renegotiated balloon mortgage on a multifamily property where the balloon payment was due within 1 year after the date of the closing of the renegotiated mortgage; and
(vii) A conversion of a balloon mortgage note on a single-family property to a fully amortizing mortgage note where the Enterprise already owns or has an interest in the balloon note at the time of the conversion.
Rent means, for a dwelling unit:
(i) When the contract rent includes all utilities, the contract rent; or
(ii) When the contract rent does not include all utilities, the contract rent plus:
(A) The actual cost of utilities not included in the contract rent; or
(B) A utility allowance.
Rental housing means dwelling units in multifamily housing and dwelling units that are not owner-occupied in single-family housing.
Rental unit means a dwelling unit that is not owner-occupied and is rented or available to rent.
Residence means a property where one or more families reside.
Residential mortgage means a mortgage on single-family or multifamily housing.
Seasoned mortgage means a mortgage on which the date of the mortgage note is more than 1 year before the Enterprise purchased the mortgage.
Second mortgage means any mortgage that has a lien position subordinate only to the lien of the first mortgage.
Secondary residence means a dwelling where the mortgagor maintains (or will maintain) a part-time place of abode and typically spends (or will spend) less than the majority of the calendar year. A person may have more than one secondary residence at a time.
Single-family housing means a residence consisting of one to four dwelling units. Single-family housing includes condominium dwelling units and dwelling units in cooperative housing projects.
Utilities means charges for electricity, piped or bottled gas, water, sewage disposal, fuel (oil, coal, kerosene, wood, solar energy, or other), and garbage and trash collection. Utilities do not include charges for cable or telephone service.
Utility allowance means either:
(i) The amount to be added to contract rent when utilities are not included in contract rent (also referred to as the ``AHS-derived utility allowance''), as issued periodically by FHFA; or
(ii) The utility allowance established under the HUD Section 8 Program (42 U.S.C. 1437f) for the area where the property is located.
Very low-income means:
(i) In the case of owner-occupied units, income not in excess of 50 percent of area median income; and
(ii) In the case of rental units, income not in excess of 50 percent of area median income, with adjustments for smaller and larger families in accordance with this part.
Working day means a day when FHFA is officially open for business. [75 FR 55930, Sept. 14, 2010, as amended at 78 FR 2328, Jan. 11, 2013]