Laserfiche WebLink
<br />e <br /> <br />e <br /> <br />", <br /> <br />t: 8. Q. When is flood insurance required by law? (33) <br /> <br />A. In order to get financing to buy, build, or improve property,located in <br />the FEMA-identified flood-prone areas ("A" zone or "V" zone areas) of a <br />community where flood insurance is available, flood insurance must be <br />purchased. The law applies to any mortgage loan, grant, or other funding <br />that in any way is federally connected - either direct financing from a <br />Federal agency (FHA, VA loans, EPA grants, etc.) or a conventional mort- <br />gage from a bank or savings and loan that is regulated or insured by the <br />Federal government. In short, flood insurance is required if: (1) the <br />community is in the flood insurance program, (2) a FEMA flood map is in <br />effect for the community in question, (3) the improved real property <br />which is a security for the loan, or the subject of a federally insured <br />or guaranteed loan is located in a FEMA designated flood-prone area, and <br />(4) the financing is through the Federal government or a federally- <br />connected lender. <br /> <br />9. Q. Who decides whether individual properties require flood insurance? (34) <br /> <br />c <br /> <br />A. When the loan, grant, etc. is directly from a Federal agency, the agency <br />itself must make the decision. In the case of provate institutions <br />covered by the Act, the lender must decide. In certain cases, where a <br />lending institution is making an FHA or VA loan, the duty should be shared <br />by both the lending institution and Federal agency. <br /> <br />10. Q. Is flood insurance required when only a portion of a lot is in a FEMA- <br />identified hazard area? (35) <br /> <br />A. If no part of the building is in a "special flood hazard area" and only <br />the land or a portion of it is in such an area, then flood insurance is <br />not required. If any part of the building is in a flood hazard area, <br />then flood insurance is required. <br /> <br />11. Q. Is flood insurance required outside of "A" or "V" zone areas? (36) <br /> <br />A. Not by law. However, lenders, to protect their investments, may require <br />the insurance outside of the required areas. <br /> <br />12. Q. Must a lender notify a borrower that a property is in a "special flood <br />hazard area" and, if so, when? (38) <br /> <br />A. Yes. Not less than 10 days prior to the closing of the transaction, the <br />lender must either (1) give written notice to the borrower or (2) obtain <br />written assurance from the seller or landlord that the borrower has been <br />notified of such hazards. <br /> <br />The lender must also notify prospective buyers whether, in the event of <br />a flood disaster, Federal disaster relief would be available to the <br /> <br />l <br />