FLOOD

According to the National Flood Insurance Program, flood is the most common disaster in the United States and flood damage claims average $30,000. Floods happen all over the country and can occur from heavy rainstorms or hurricanes, melting snow, plumbing malfunctions, levee or dam failures and rising bodies of water. Changes in drainage patterns from the construction of new developments can cause floods in adjacent properties.

Mortgage lenders are required by law to determine if a property is in a Special Flood Hazard Area (SFHA) as designated by the Federal Emergency Management Agency (FEMA) prior to closing the loan. If it is, lenders must secure flood insurance for the home before the loan can close, and the insurance must be in place throughout the life of the loan.

If the property is in a common interest development and in an SFHA, the homeowners’ association, not the individual owner, is responsible for acquiring and maintaining flood insurance. In order for a borrower to obtain an FHA-insured loan for a unit within their complex, HOAs must be certified by FHA after providing proof of flood insurance. Without the certificate, the property will not be eligible for FHA mortgage insurance.

Flood insurance is not required if the property is not in an SFHA but can be purchased through FEMA and NFIP via a licensed agent or broker. If your association is interested in flood insurance protection, we will be happy to help.