Does a bank need to go through the flood insurance process (obtaining a SFHDF, borrower notification, evidence of adequate flood insurance, etc.) for individual co-op units? I understand we would be obtaining a security interest in the shares of stock and not in the building, and have received differing opinions on the requirements.
I've reviewed the Mandatory Purchase of Flood Insurance Guidelines which discusses insurance requirements for the building but is a bank required to even run a SFHDF if the loan is only for a unit?

Where can I find guidance on this?

Section D of the 'Mandatory Purchase' booklet is for condos, coops and timeshares. I'm looking at the co-op section right now and it states that 'Cooperative buildings where at least 75% of the area of the building is used for residential purposes are considered residential occupancies under the NFIP. Such residential building owners can insure the building under the General Property Form for a maximum building coverate limit of $250,000 in ra Regular Program Community.'

Of course this section doesn't state whether the bank has to require it or not.

One particular lender was having a hard time with this, so to be safe we sort of fell back on the very first paragraph in Section D on page 45 of the Purchase Guidelines... "the mandatory purchase of flood insurance guidelines apply with equal force to condominium, cooperative, and timeshare units."

As a result, this lender now issues flood certs for each co-op unit. Until there is clearer guidance out there suggesting this should not be the case.