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At the time you apply, we obtain a Standard Flood Hazard Determination Form (SFHDF) to identify if your home is in a special flood hazard area. This will tell us early in the loan process if flood insurance is required and available. SFHDF is generated by a “Flood Zone Determination Company.” If the property is in a special flood hazard area, we send a Notice of Special Flood Hazards and the SFHDF to you advising to obtain flood insurance. The amount of insurance coverage is based on the combination of loan amount, replacement value of the property, and maximum federal insurance coverage limits. If your property is in one of these zones, then any mortgage company may not be able to fund and close the loan without receiving the proof of obtaining flood insurance.
Federal Emergency Management Agency (FEMA) maintains and updates flood maps, fairly often, that identify the risk of flooding in a community by assigning flood zone categories to different parts of the map.
Within a flood map, a flood zone denotes the level of risk for flooding in a particular area. Flood zones are assigned codes that denote different levels of risk. All flood zones beginning with the letter "A" or "V" are considered Special Flood Hazard Areas (SFHAs). If any part of the building or mobile home is within the SFHA, the entire building or mobile home is considered to be in the SFHA. In an SFHA all or a portion of the property has a 1% chance each year of being inundated by flood waters. In the context of mortgages, there is at least a 1 in 4 chance of flooding during a 30-year mortgage.
The current NFIP map may be obtained from FEMA by calling 1-800-358-9616. Scanned copies of the NFIP maps can be viewed on FEMA's Flood Map Service Center (MSC) webpage.
Below are certain steps that you can take to verify if the flood determination in SFHDF is correct.
Flood Smart: Go to FEMA’s Flood Smart website (www.floodsmart.gov), and enter your address in the form titled "How Can I Get Covered?". The website will identify whether your property is in a flood zone. However, note that not all addresses are available on the site. Another limitation is that the website does not provide whether federal flood insurance is available or not.
Appraisal Report: The appraisal report lists whether the property is in a flood zone. This is typically listed on page 1 of the uniform residential appraisal report (FNMA Form 1004). If the flood zone determination within the appraisal report and the SFHDF are not same, then the lender should follow up with the flood zone determination company and the appraiser to ensure that they address the discrepancy.
FEMA Flood Maps: This is a reliable, yet cumbersome, method of verifying whether the property is in a flood zone. To access the flood maps visit the FEMA’s Flood Map Service Center (MSC) webpage. MSC is the official public source for flood hazard information and you can use it find your official flood map.
As you may know, your standard hazard insurance does not cover damage due to flooding.
