CalSTRS Home Loan Program Glossary

General Information

Glossary of acronyms used in this report.


80/17 Program

This previously offered program consisted of an 80 percent loan-to-value first mortgage and a 17 percent second mortgage that was deferred for the first five years of the 30-year mortgage term. The borrower would pay the remaining 3 percent of the purchase price at closing.

95/5 Program

This previously offered program consisted of a 95 percent loan-to-value first lien mortgage with a 5 percent deferred second mortgage. The program provided 100 percent financing with no down payment requirement.



An index that is used as the standard for comparison in measuring the performance of a given portfolio.


The California State Teachers’ Retirement System Board of Trustees.


California Housing Finance Agency (CalHFA, f.k.a. CHFA)

California agency with responsibility for supporting the needs of renters and first-time homebuyers by providing financing and programs that create safe, decent, and affordable housing opportunities for low and moderate income Californians.

Conforming Loan

A mortgage that meets the qualifying criteria set by Fannie Mae and Freddie Mac that make it eligible for purchase. One such requirement is that the loan must be equal to or less than the conforming loan limit set by Fannie Mae or Freddie Mac. A conforming loan carries a lower interest rate and generally more favorable terms than a jumbo loan.

Conventional Loan

A mortgage in which the interest rate does not change during the entire term of the loan. Also, a mortgage that is not insured or guaranteed by the government, thus the lender bears more risk and generally has higher standards for qualification. For comparison, a loan guaranteed by the Veterans Administration (VA) or insured by the Federal Housing Administration (FHA) would not be a conventional loan.


Federal Housing Finance Authority (FHFA)

An independent federal agency charged to supervise, regulate and oversee the Government Sponsored Enterprises (GSEs). FHFA was appointed as the government conservator controlling Fannie Mae and Freddie Mac since they were bailed out in 2008.

Federal National Mortgage Association / Federal Home Loan Mortgage Corporation Guidelines

The specifications required by the Federal National Mortgage Association (FNMA, Fannie Mae) or the Federal Home Loan Mortgage Corp. (FHLMC, Freddie Mac), in order to be eligible for guarantee as to principal and interest payments. FNMA and FHLMC are private corporations, federally chartered to provide financial products and services that increase the availability and affordability of housing for low-, moderate-, and middle-income Americans.


Government Sponsored Enterprise (GSE)

Typically the term refers to Fannie Mae, Freddie Mac and Ginnie Mae.


Home Affordable Modification Program (HAMP)

A component of the federal government’s Making Home Affordable® Program (MHA). HAMP is designed to enable borrowers that meet eligibility requirements avoid foreclosure by modifying loans to a level that is affordable for borrowers and sustainable for the long-term. This initiative is targeted at delinquent borrowers and those facing imminent risk of default with loans originated prior to January 1, 2009. The goal is a reduction in the borrower’s mortgage payments to 31 percent of monthly income.

Home Affordable Refinance Program (HARP)

A component of the federal government’s Making Home Affordable® Program (MHA). HARP is designed to allow borrowers who meet eligibility requirements refinance their first mortgage into a more affordable mortgage. Among the requirements, the borrower must be current with payments, and the mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. HARP does not apply to second mortgages.

Housing and Urban Development (HUD)

United States Department of Housing and Urban Development. A Cabinet-level department in the Executive Branch of the federal government. HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.


Loan Rate

The cost of using money, expressed as a rate per period of time.


Making Home Affordable (MHA)

A federal government plan to stabilize the housing market and help Americans reduce their monthly mortgage payments to more affordable levels.


The creditor or lender in a mortgage agreement.

Mortgage Insurance

Insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property.

Mortgage-Backed Security (MBS)

A security that is issued by a federal agency, such as the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association, that is backed by mortgages. Payments to investors are received out of the interest and principal of the underlying mortgages.


The borrower in a mortgage agreement.


Neighborhood Assistance Program (NACA)

A non-profit, community advocacy and homeownership organization with the goal of building strong, healthy neighborhoods nationwide through affordable homeownership.


A loan not eligible for guarantee as to principal and interest by FNMA or other federally chartered housing agency, based upon the borrower’s qualifying ratios and/or loan amount.



A feature in some types of mortgages where the remaining scheduled principal and interest payments are recalculated based on a new amortization table. Most often, a recast is associated with a negative amortization mortgage which must recast at some point so that the mortgage will be paid off by the end of its scheduled term.


Servicing Agent

An institution with the capacity of a master servicer and the ability to originate mortgage loans and to provide administrative support for a residential mortgage lending program.


Whole Loans

A secondary mortgage market term which refers to an investment in an original mortgage loan, versus a loan which participates in a secured pass-through security.