Fair Market Value (FMV) - An economic concept designating the price at which a willing seller and willing buyer will agree when both parties are acting prudently, knowledgeably, and under no compulsion to sell or buy.
Federal National Mortgage Association(FNMA) - Commonly known as "Fannie Mae", the FNMA is the largest buyer of existing mortgages. The Federal National Mortgage Association was originally organized by the federal government in 1938 to purchase FHA-insured mortgages. The association was reorganized in 1968 as a quasi-private corporation whose entire ownership is private. Fannie Mae raises capital by issuing corporate stock which is actively traded on the New York Stock Exchange and by selling mortgages out of its portfolio to various investors.
Fee Simple - An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.
Fiduciary - The Employee Retirement Income Security Act (ERISA) defines a fiduciary as any person who exercises any discretionary authority or control over a plan's asset management, administration or disposition, or renders investment advice for a fee or other compensation with respect to a plan's assets. Fiduciaries may include staff, trustees, investment board members, administrators, consultants, actuaries and investment managers. ERISA permits civil action to be brought by a beneficiary against any fiduciary that has breached its fiduciary duty.
Fiduciaries can be held personally liable for any losses to a plan resulting from such breach.
First Mortgage - A lien on property in which the lenders claims are superior to the rights of subsequent lenders. Certain lenders only make first mortgages due to regulatory requirements; others limit mortgages to these senior instruments due to company policy.
Fixed Expenses - Expenditures such as property taxes, license fees, and property insurance that are not directly affected, by the occupancy of the property. Fixed expenses along with operating expenses are subtracted from effective gross income to determine the net operating income of property.
Flex Space - A building providing use flexibility between office, and other uses such as manufacturing, laboratory, warehouse, etc. Usually provides high bays and relocation flexibility for overhead doors and other entrances.
Floor - The minimum rate of interest payable on an adjustable-rate mortgage.
Force Majeure - (An uncontrollable force) an event outside the reasonable control of the parties to a contract such as an "Act of God", war, riots or strikes which would prevents the parties from complying with the provisions of an agreement.
Foreclosure - (non-judicial): a popular term used to describe the procedure followed in enforcing a creditor's rights when a debt secured by any lien on property is in default; however, the correct term for a "Foreclosure" involving a deed of trust is a "Trustee's Sale Proceeding."
Forward Commitment - An agreement between a permanent lender and an interim (typically construction) lender wherein the permanent lender issues a conditional commitment that will replace the construction loan once a given set of terms and conditions have been achieved.
Four Quadrants of the Real Estate Capital Markets - Private equity: Direct real estate investments acquired privately, Public equity: REITs and other publicly traded real estate operating companies, Private debt: Whole loan mortgages, Public Debt: Commercial mortgage-backed securities and other securitized forms of whole loan mortgage interests
Full Recourse - A loan on which an endorser or guarantor is liable in the event of default by the borrower
Fully Amortized Mortgage (Loan) - A loan that is fully repaid at maturity by periodic (monthly) reductions of the principal. The first part of each monthly payment covers interest on the outstanding debt as of the payment due date and the remainder of the payment goes to reduce the outstanding debt.