We have a loan on a condo unit located on the 10th floor. The property is located in a flood zone. The first floor of the condo building is the garage and there are no units. Does the bank still have to have all the flood requirements in place even though there is no chance of this particular condo on the 10th floor ever flooding? I've looked through FEMA handbook and didn't locate a discussion on this particular issue where there is only a garage or concrete that is located in the flood zone. If someone has an answer would you place reference the FEMA handbook. I pretty much live by that book, but I always question the right procedure on condos. Thanks.

Yes, the requirements stand. Ask the people in Galveston regarding their 10th floor condos where the condo's infrastructure was undermined or destroyed by the flood caused by Hurricane Ike and the condos are now unlivable even though their specific condo is high and dry. Having a 10th floor condo with no power or electricity or cracks in the base of the foundation as collateral is probably not something the bank would want either.

Oh - the reference: see the chart on page 6 that states: Is the "building" in a SFHA.

Absolutely!! All it takes is a major flood to wash away the foundation and your 10th floor condo just became a 1st floor condo, or a heap of rubble.

You guys are good thanks. On page 17 of the FEMA Handbook it gives an example of elevation; however, it still stays the required insurance should be in place. It does state that the insurance co. might give a lessor rate and reduced premium for this. Any opinion on this or ever seen an insurance co. give a lesser rate or premium?

If this is a residential condo, you will need to be looking at the RCBAP for sufficiency long before requiring the borrower to obtain an individual dwelling policy.

Page 17 talks about map amendments which is to exclude the building from the SFHA. I will assume you are referring to the following statement:

Insurance is required because the foundation on which the house is elevated is still below the BFE, where it remains exposed to the action of floodwaters. However, because of its reduced exposure to damage, the newly elevated building will be subject to a lower insurance rate and premium.

That would not apply to a condo unit located on the 10th floor of a condo building located within a SFHA. It applies to the building itself.


PS. You want to pay specific attention the the sentence immediately following the above statement.

A lender may never waive the flood insurance requirement if the eligible building is determined to be in an SFHA.