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Accessory Dwelling Unit (ADU)

A smaller, independent living space that shares a property with a larger, primary home. It includes its own kitchen, sleeping area, and bathroom facilities and can be attached to, built within, or detached from the main house.

Second Lien

A loan taken out using your property as collateral, after you already have a primary mortgage on that same property. It's often called a second mortgage or home equity loan.

Insure (a loan)

When a government agency or private company agrees to cover part or all of a loan if the borrower fails to repay it. This reduces the risk for the lender, making them more likely to offer the loan.

Securitization

The process of combining many individual loans (like mortgages) into a single package, which is then sold to investors as a security. This helps create more funds for future lending.

Federal National Mortgage Association (Fannie Mae) & Federal Home Loan Mortgage Corporation (Freddie Mac)

Government-sponsored companies that buy mortgages from banks and other lenders, package them into securities, and sell them to investors. This helps ensure that money is always available for people to borrow for home loans.

National Housing Act

A federal law passed in 1934 that created the Federal Housing Administration (FHA) to insure mortgages, making homeownership more accessible and stabilizing the housing market.