FHA Flood Insurance Requirements

FEMA Compliance

• Requirements for flood insurance must follow the Federal Emergency Management Agency guidelines. These state that any improvements within flood hazard areas must have flood insurance if there is also a mortgage attached to the improvement. Both the lender and the buyer are responsible for determining if flood insurance is required.

Residency Requirements

• Flood insurance is required for residents of a flood zone if they own the property; landlords who own property within a flood zone are also required to have flood insurance on all properties within the flood plane.

Mortgage Requirements

• Lenders originating mortgages on properties within flood zones must verify proof of flood insurance has been placed upon the property. Completion of the loan cannot continue until proof of insurance is provided by the buyer. Flood insurance must remain in force for the duration of the mortgage regardless of any increase, extension, renewal or transfer. Lenders holding these types of mortgages must notify FEMA when any changes occur with the mortgage. Lenders are required to obtain insurance should the buyer allow insurance to lapse. Lenders are allowed to add premiums of coverage onto the mortgage should this occur.