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Question & Answer
Question: We have just done a compliance audit and found inconsistencies on flood insurance, particularly for mobile homes. When should we take steps to certify and get flood insurance - if needed- on mobile homes?
Answer: The glib answer is that you should certify the property and require insurance as appropriate whenever the mobile home isn't mobile. This may actually be the easiest way to explain it to your lending staff. The flood insurance requirements apply to improved real property. Until a mobile or manufactured home is affixed, attached, hooked up or plugged in to real property, it is not real property by itself. It remains personal property and may also be a motor vehicle, depending on how your state law defines motor vehicles.
The flood insurance certification procedures are triggered whenever you have an address and an intent to connect the mobile or manufactured home to that address. Of course, the address, which is often a mobile home park, is already improved if it is ready for the mobile or manufactured homes. So that a loan taking the mobile home park as security would be subject to the flood hazard requirements even before the mobile homes arrive.
Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 3, 3/98
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