Key Terms in Housing and Mortgage
Financing ACTUAL QUESTIONS AND
CORRECT ANSWERS
Adjustable Rate Mortgage (ARM) - CORRECT ANSWERS✅✅Adjustable rate mortgages
have an initial rate that applies for a defined period of time (typically from one month to 10
years), then adjusts at pre-determined intervals for the life of the loan. Interest rates can
increase or decrease when adjusted.
Adjusted Gross Income - CORRECT ANSWERS✅✅Gross income minus adjustments, or
reductions, that one is eligible for, such as deductions for unreimbursed business expenses,
tuition and fees, and contributions to certain retirement accounts.
AFFH - CORRECT ANSWERS✅✅Affirmatively Furthering Fair Housing
AFHMP - CORRECT ANSWERS✅✅Affirmative Fair Housing Marketing Plan
Analysis of Impediments (AI) - CORRECT ANSWERS✅✅Analysis of Impediments is a
review of impediments or barriers that affect the rights of fair housing choice. It covers public
and private policies, practices, and procedures affecting housing choice. Impediments to fair
housing choice are defined as any actions, omissions, or decisions that restrict, or have the
effect of restricting, the availability of housing choices, based on race, color, religion, sex,
disability, familial status, or national origin. The AI supports fair housing planning; provides
essential information to policy makers, administrative staff, housing providers, lenders, and
fair housing advocates; and assists in building public support for fair housing efforts.
Area Median Income (AMI) - CORRECT ANSWERS✅✅The midpoint in the family
income range for a metropolitan statistical area or for the non-metropolitan parts of a state.
Determined annually by HUD, the figure often is used as a basis to stratify incomes into very
low, low, moderate, and above moderate. Frequently used to determine income eligibility for
various housing programs.
Arrearages - CORRECT ANSWERS✅✅The total amount of past due payments owed to a
lender from a borrower in mortgage payments or to a landlord from a tenant in rental
payments. Also called arrears.
, Assistance Animal - CORRECT ANSWERS✅✅An assistance animal is not considered a
pet. it is an animal that works, provides assistance, or performs tasks for the benefit of a
person with a disability, or provides emotional support that alleviates one or more identifies
symptoms or effects of a person's disability. For purposes of reasonable accommodation
requests, the Fair Housing Act does not require an assistance animal to be individually
trained or certified. While dogs are the most common type of assistance animal, other animals
can also be assistance animals.
Association Dues - CORRECT ANSWERS✅✅Charged by a community or Homeowners
Association to pay for repairs, upkeep, landscaping, improvements, and property
management.
Back-End Ratio - CORRECT ANSWERS✅✅A rate that calculates a borrower's total
monthly debt, including housing and other debt obligations, as a percentage of gross monthly
income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a debt-
to-income ratio.
Balloon Payment - CORRECT ANSWERS✅✅An oversize payment due at the end of a
mortgage.
Blockbusting - CORRECT ANSWERS✅✅To convince, or attempt to convince, a person to
sell or rent a dwelling because of the entry, or prospective entry, into the neighborhood of a
person or persons of a particular race, color, religion, sex, familial status, national origin, or
with a disability.
Cash-for-keys - CORRECT ANSWERS✅✅An alternative to a legal eviction following
foreclosure. The occupant receives cash funds from the servicer in exchange for turning in
the keys and vacating the property. Certain conditions apply, such as returning the property in
broom-clean condition and with all appliances.
CDBG - CORRECT ANSWERS✅✅Community Development Block Grant
CFPB - CORRECT ANSWERS✅✅Consumer Financial Protection Bureau
Closing Costs - CORRECT ANSWERS✅✅Fees for final property transfer that are not
included in the price of the property.
Financing ACTUAL QUESTIONS AND
CORRECT ANSWERS
Adjustable Rate Mortgage (ARM) - CORRECT ANSWERS✅✅Adjustable rate mortgages
have an initial rate that applies for a defined period of time (typically from one month to 10
years), then adjusts at pre-determined intervals for the life of the loan. Interest rates can
increase or decrease when adjusted.
Adjusted Gross Income - CORRECT ANSWERS✅✅Gross income minus adjustments, or
reductions, that one is eligible for, such as deductions for unreimbursed business expenses,
tuition and fees, and contributions to certain retirement accounts.
AFFH - CORRECT ANSWERS✅✅Affirmatively Furthering Fair Housing
AFHMP - CORRECT ANSWERS✅✅Affirmative Fair Housing Marketing Plan
Analysis of Impediments (AI) - CORRECT ANSWERS✅✅Analysis of Impediments is a
review of impediments or barriers that affect the rights of fair housing choice. It covers public
and private policies, practices, and procedures affecting housing choice. Impediments to fair
housing choice are defined as any actions, omissions, or decisions that restrict, or have the
effect of restricting, the availability of housing choices, based on race, color, religion, sex,
disability, familial status, or national origin. The AI supports fair housing planning; provides
essential information to policy makers, administrative staff, housing providers, lenders, and
fair housing advocates; and assists in building public support for fair housing efforts.
Area Median Income (AMI) - CORRECT ANSWERS✅✅The midpoint in the family
income range for a metropolitan statistical area or for the non-metropolitan parts of a state.
Determined annually by HUD, the figure often is used as a basis to stratify incomes into very
low, low, moderate, and above moderate. Frequently used to determine income eligibility for
various housing programs.
Arrearages - CORRECT ANSWERS✅✅The total amount of past due payments owed to a
lender from a borrower in mortgage payments or to a landlord from a tenant in rental
payments. Also called arrears.
, Assistance Animal - CORRECT ANSWERS✅✅An assistance animal is not considered a
pet. it is an animal that works, provides assistance, or performs tasks for the benefit of a
person with a disability, or provides emotional support that alleviates one or more identifies
symptoms or effects of a person's disability. For purposes of reasonable accommodation
requests, the Fair Housing Act does not require an assistance animal to be individually
trained or certified. While dogs are the most common type of assistance animal, other animals
can also be assistance animals.
Association Dues - CORRECT ANSWERS✅✅Charged by a community or Homeowners
Association to pay for repairs, upkeep, landscaping, improvements, and property
management.
Back-End Ratio - CORRECT ANSWERS✅✅A rate that calculates a borrower's total
monthly debt, including housing and other debt obligations, as a percentage of gross monthly
income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a debt-
to-income ratio.
Balloon Payment - CORRECT ANSWERS✅✅An oversize payment due at the end of a
mortgage.
Blockbusting - CORRECT ANSWERS✅✅To convince, or attempt to convince, a person to
sell or rent a dwelling because of the entry, or prospective entry, into the neighborhood of a
person or persons of a particular race, color, religion, sex, familial status, national origin, or
with a disability.
Cash-for-keys - CORRECT ANSWERS✅✅An alternative to a legal eviction following
foreclosure. The occupant receives cash funds from the servicer in exchange for turning in
the keys and vacating the property. Certain conditions apply, such as returning the property in
broom-clean condition and with all appliances.
CDBG - CORRECT ANSWERS✅✅Community Development Block Grant
CFPB - CORRECT ANSWERS✅✅Consumer Financial Protection Bureau
Closing Costs - CORRECT ANSWERS✅✅Fees for final property transfer that are not
included in the price of the property.
