1. Affordable Housing: Housing that is reasonably priced and within the financial means of low- to moderate-income individuals or families. This means housing costs are no more than ⅓ of your gross income.
  2. Governmental affordable housing income limits are based on the percentage of Area Median Income (AMI). Households with income below 80% AMI qualify for most affordable housing programs, though some down payment assistance and other special financing options go up to 120% AMI.
  3. Real Estate Agency in NC: It is important to know how a real estate agent can represent you in NC. For information on about how agency works, please see this brochure https://www.ncrec.gov/Brochures/WWREABrochure.pdf
  4. Area Median Income (AMI): The median income of a specific geographic area, used to determine eligibility for affordable housing programs. This number changes frequently. Speak to an affordable housing advocate to find out if you qualify for affordable housing programs.
  5. Amortization: The process of gradually paying off a mortgage or loan over time through regular installments. In the beginning, the largest portion of one’s payment will be interest. As time passes, the payments gradually include more principle and less interest.
  6. Closing attorney: A lawyer responsible for overseeing the closing process and ensuring all legal documents are in order.
  7. Closing costs: The fees and expenses incurred during the real estate transaction’s closing, including taxes, lender fees, HOA dues, and other charges.
  8. Credit Score: A numerical representation of a person’s creditworthiness, often used by lenders to assess loan eligibility and interest rates.
  9. Due Diligence Fee: In NC, a non-refundable fee paid by the buyer when a contract to purchase is formed to secure the property and show their commitment to the purchase. This fee is NOT refundable, if a buyer terminates the contract.
  10. Deed: A legal document that transfers ownership of a property from one party to another.
  11. Deed of Trust: A legal document used to secure a loan for the purchase of real estate. Also commonly known as a mortgage.
  1. Delay in settlement: A situation where the closing or settlement date is postponed. In NC, the standard contract offers a 7 day delay in settlement period, in which parties can postpone closing without the need to amend the contract.
  1. Debt to Income Ratio (DTI): A financial metric used by lenders to assess a borrower’s ability to manage additional debt based on their current income and existing debts. Most mortgage lenders will not allow a borrower’s total debt (including a mortgage) to be more than 42% of their income.
  1. Down Payment: The initial payment made by the buyer toward the purchase price of a property. This amount is based on the mortgage loan you are getting and your credit score.
  1. Down Payment Assistance: Financial aid, 2nd mortgages, or grants provided to eligible homebuyers to assist them in covering their down payment costs.
  1. Earnest Money Deposit (EMD): A deposit made by the buyer to the seller to demonstrate their serious intent to purchase the property. In NC, this deposit is potentially refundable, if a buyer terminates a contract.
  1. Equity: The portion of a home’s value that is not mortgaged. For example: If a home is worth $200,000, and you owe a principal balance of $150,000, you have $50,000 dollars in equity.
  1. Fair Housing: A set of laws and regulations designed to prevent discrimination in the housing market based on race, color, religion, sex (including gender identity and sexual orientation), national origin, disability, or familial status.
  1. First-time Homebuyer: Broadly, a person who is purchasing a home for the first time. However, this is NOT a strict definition. This can also mean a person who has not owned a home in the last 3 years or a person who is purchasing a home by themselves for the first time. Speak to your lender to see if you can use first-time home buyer programs. 
  1. GIS (Geographic Information System): A computerized mapping system that utilizes geographic data to analyze, manage, and present information related to real estate and other geographic features. Most counties have an online GIS system which can be used to lookup properties and link to deeds, tax information, and other records.
  1. Grant: Financial aid or funding provided to individuals or organizations for specific purposes, including housing-related assistance. Many grants do not have to be repaid, and some are forgivable over time.
  1. Home Equity Line of Credit (HELOC): A line of credit secured by the equity in a home, allowing homeowners to borrow against the value of their property. These are typically open lines of credit and hold higher interest rates than a regular mortgage.
  1. Home inspection: A thorough examination of a property’s condition to identify potential issues before the purchase is finalized. Many other inspections may be added on, as well, including HVAC, septic, well, pest, structural engineer, and other specialized inspections.
  1. Home Owners Association (HOA): An organization that manages and governs a residential community, collecting fees for maintenance, and enforcing rules and regulations.
  1. HUD/Settlement Statement: A document detailing all the charges and credits involved in a real estate transaction’s closing.
  1. Homeowner’s Insurance: Protection against potential financial loss in case of property damage. This is usually handled through an escrow account provided by the lender, if your home is mortgaged.
  1. Lien: A legal claim against a property to secure a debt payment or unpaid bills. Mortgage companies have a lien on a property for which they have provided financing. Governmental taxing offices, HOAs, and contractors can also place a lien on a property for unpaid taxes, dues, or other fees.
  1. Limited Affordability: In our area, apartment developers can be granted zoning variances, if they offer a certain number of units at affordable rates for an extended period of time. In our Local Guide to Western North Carolina Affordable Housing, these communities are listed as “Other Properties with Limited Affordability.”
  1. Loan-to-Value (LTV): The ratio of the loan amount to the appraised value or purchase price of the property, used by lenders to assess risk.
  1. Planned Unit Development (PUD): A type of residential development with a mix of housing types and shared common areas. For example: a neighborhood may have a mix of single family homes, townhomes, and duplexes. Some PUDs may also have commercial or live/work space.
  1. Private Mortgage Insurance (PMI): Insurance required by lenders for borrowers who provide a down payment less than 20% of the property’s value. This protects the lender from a loss if a property owner with little accrued equity defaults on their loan.
  1. Renter’s Rights: Legal protections and entitlements granted to individuals who rent a property. Each state, county, or municipality can have different laws in regards to landlord/tenant laws. However, federal fair housing law applies to any housing transaction or relationship.
  1. Radon: A colorless and odorless radioactive gas that can be harmful when accumulated in indoor spaces.
  1. Real Estate Agent Vs. REALTORⓇ: Any person who is licensed by the state to perform real estate services is a real estate agent/broker. REALTORS are members of a trade association at local, state, and federal levels, and must adhere to a strict code of ethics.
  1. Recording: The process of registering real estate documents with the Register of Deeds office to establish public notice of their existence.
  1. Register of Deeds: A public official responsible for recording and maintaining vital records and real estate documents in a county. Recorded real estate documents include, deeds, deeds of trust, liens, property restrictions, and more
  1. Settlement vs. Closing: These terms are often used interchangeably and refer to the final step in a real estate transaction when the property officially changes ownership.
  1. Property Taxes: Annual taxes that homeowners pay to the town/city/county based on the assessed value of their property.
  1. Workforce Housing: Housing designed to accommodate middle-income workers and professionals in a particular area. Households that make between 80-120% AMI qualify for workforce housing.

** Please note that this dictionary provides a general overview of housing, affordable housing, fair housing, and lending terms. It is always recommended to consult with professionals in the housing and lending industry for specific and detailed information related to your personal circumstances. **