Homeownership Glossary

We believe understanding the process is just as important as the journey itself. That’s why we’ve created the Homeownership Glossary, a resource designed to help you navigate the journey to homeownership more clearly and confidently!

Below are some terms you may hear throughout the homebuying process, whether you are purchasing through our program or on the open market.

If you are interested in diving deeper into financial and homebuyer education, we encourage you to register for our Get Ready Program!

• AMI:

  Area median income

• CD:

  Closing disclosure

• CO:

  Certificate of Occupancy

• CREDIT CARD UTILIZATION:

  the amount of credit you’re using compared to your total available credit

• DEBT-TO-INCOME RATIO (DTI):

  A measure of your ability to manage your debt, calculated by dividing your monthly debt payments by your gross monthly income. 

  To calculate your DTI:

  1. Calculate Total Monthly Debt Payments

  • List your monthly debt obligations: Include your rent or mortgage, car loans, student loans, alimony, child support, and minimum monthly credit card payments. 

  • Sum these payments: Add all the monthly debt payments together to get your total monthly debt amount. 

  • Exclude non-debt expenses: Do not include fluctuating expenses like groceries, gas, or utilities. 

  2. Determine Your Gross Monthly Income

  • Gather your income sources: Collect information on all your income sources before taxes, such as your salary, wages, bonuses, tips, and any other consistent income. 

  • Exclude income with limited history: Lenders generally do not count income from sources with a history of less than two years for loan qualification purposes. 

  3. Perform the Calculation

  • Divide: Divide your total monthly debt payments by your total gross monthly income. 

  • Convert to percentage: Multiply the result by 100 to get your debt-to-income ratio as a percentage.

• DTI:

  Debt-to-income

• ECOA:

  Equal Credit Opportunity Act

• EQUITY

  The homeowner's financial stake in the property, calculated as the difference

  between the home's market value and the outstanding mortgage balance.

• ESCROW:

  An account managed by the lender to hold funds for property taxes and insurance.

• FMV:

  Fair market value

• HFHI:

  Habitat for Humanity International

• HOI:

  Homeowners Insurance

• LE:

  Loan estimate

• LOX:

  Letter of Explanation. For Homeowner Services this is a written explanation of a financial transaction (i.e. $500 Zelle payment = rent paid to Mr. So-and-so for July)

• NOI:

  Notice of Incompleteness

• PII:

  Personal identifiable information

• QLO:

  Qualified Loan Originator

• RESPA:

  Real Estate Settlement Procedures Act

• SSN:

  Social Security number

• SWEAT EQUITY:

  contribution to a project or enterprise in the form of effort and toil. Sweat equity is the ownership interest, or increase in value, that is created as a direct result of hard work by the owner(s). It is the preferred mode of building equity for cash-strapped entrepreneurs in their start-up ventures, since they may be unable to contribute much financial capital to their enterprise.

• THDA:

  Tennessee Housing Development Agency

• TILA:

  Truth in Lending Act

• TRID:

  TILA/RESPA Integrated Disclosure Rule

• UDAAP:

  Unfair, deceptive or abusive acts or practices

• USDA:

  United States Department of Agriculture