I know this topic has been discussed many times on here, but while researching 'rigid' walls, I came across this and thought it spelled it out quite nicely and thought I'd pass it on. Hope it helps someone out.

Building: As used by the Community Rating System (CRS), the term is the same as “structure” in the NFIP regulations (44 CFR 59.1). For CRS purposes, a building is a structure that is walled and roofed, principally above ground and permanently affixed to a site. The term includes a manufactured (mobile) home on a permanent foundation (such as a poured masonry slab, foundation walls, piers, or block supports) so that no weight is carried by the wheels or axles. “Walled and roofed” means that a building has two or more rigid exterior walls in place and is adequately anchored so that it will resist flotation, collapse, and lateral movement. “Principally above ground” means that at least 51% of the actual cash value of the building, including equipment and machinery that are part of the building, is above ground.

Must be anchored if located in a Special
Flood Hazard Area (SFHA). For flood insurance
coverage, all new policies and subsequent
renewals of those policies must be based
upon the specific anchoring requirements
identified below:A manufactured (mobile) home located within
an SFHA must be anchored to a permanent
foundation to resist flotation, collapse, or
lateral movement by providing over-the-top or
frame ties to ground anchors; or in accordance
with manufacturer’s specifications; or in
compliance with the community’s floodplain
management requirements.

Thank you for saving my day! I now have un-arguable documentation that I needed to protect our backs on a new loan!

Glad to be of help! I've seen so many arguments of "but it still has wheels and axles underneath", but yet was on piers and tied down.

It made my day to to find this expansion on MH's. BTW, it also applies to recreational vehicles that have been 'permanently affixed'. And I had one of those years ago, so I know they do exist!

While on this subject of mobile homes, if we have a mobile but is not on a perm foundation and in a flood zone do we still need to provide the flood insurance notice at least 10 days prior to closing?

To my knowledge, you would have to require it to be on a permanent foundation (whatever your codes deem permanent) and insurance in place before you can close on the loan.

were are not requiring it to be on perm foundation and will not need flood insurance. I just wanted to verify if the Notice to Borrower in a Flood Zone is stilled required and if we still have to provide to customer 10days prior to closing?

I believe RR Joker is saying that flood requirements dictate that you have to require the mobile home to be on a perm foundation and have flood insurance in order to close. It is not the banks option.

nikki..see if the following thread helps you out. TMatt87 is interpreting correctly for me.

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1700052&Searchpage=2&Main=185150&Words=%2Bmobile+%2Bhome&Search=true#Post1700052

Sorry that link didn't post correctly, but a cut/paste works.

From the NFIP Manual - you will find a specific statement in a community's flood plain management requirements. They must require the mobile homes to be tied down in order to be eligible for flood insurance in the community:

A manufactured (mobile) home located within
an SFHA must be anchored to a permanent
foundation to resist flotation, collapse, or
lateral movement by providing over-the-top or
frame ties to ground anchors; or in accordance
with manufacturer’s specifications; or in
compliance with the community’s floodplain
management requirements.

Thank you all for your help. Can one of you please point out where is states that "tied down" requires flood insurance and/or means the same as "permanent foundation" per regulations to show my loan officers.

Handbook for New Mexico Flood Plain Managers, Section 12.7, manufactured homes

http://documents.clubexpress.com/documents.ashx?key=1kK%2FXMBhX2Q1PVGZh5brzREbgtqy0edDzlPiD41QCSyoJ3nf0mmb%2BA%3D%3D

I know this is an older thread but I have the same questions and the link RR Joker provided has me questioniing my understanding.

Here is what I'm coming up with...
Mobile homes –
o Mobile Home only
> If the mobile home is affixed flood is required even if we don’t take the land as collateral
> If the mobile home is not affixed and we don’t take the land as collateral then no insurance is required (until they permanently affix it.)
o Land only
> If we take the land as collateral and the home is affixed flood is required
> If we take the land as collateral and the mobile is not affixed, flood isn’t required (until the mobile home is affixed)
o Land and Mobile Home
> If we take the land and the mobile home then we must require the home to be affixed and flood is required

Basically, the only times that flood isn’t required is if the mobile home is not affixed and we only take either the land or the home.

If the mobile home is not affixed and sits in a special flood hazard area, the mobile home must BECOME affixed if you want to loan money against it. You can't make the loan and say "well, it isn't affixed, so we don't need flood insurance". It is true that the borrower won't be able to get flood insurance until it IS affixed.

Whether you take RE with the mobile home has no bearing.

The following is from Q&A #74 that RR brought up in the linked thread above -

In the case of loan transactions secured by mobile homes not located on a permanent foundation, the Agencies note that such “home only” transactions are excluded from the definition of mobile home and the notice requirements would not apply to these transactions.

Also, when you look at the definitions section of the Reg -

(6) Mobile home means a structure, transportable in one or more sections, that is built on a permanent chassis and designed for use with or without a permanent foundation when attached to the required utilities. The term mobile home does not include a recreational vehicle. For purposes of this section, the term mobile home means a mobile home on a permanent foundation. The term mobile home includes a manufactured home as that term is used in the National Flood Insurance Program.

If the mobile home is affixed it is clear that flood applies. It is also clear that if it isn't affixed you can't obtain insurance.

What isn't clear is that you have to require it to be affixed so that you can obtain insurance.

Reading this 2009 interpretation by Dan Persfull seems to muddy the water even further.

Flood Insurance & Mobile Homes

In reviewing section 339.3 which he references I see the following -

Requirement to purchase flood insurance where available

In general. A bank shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the overall value of the property securing the designated loan minus the value of the land on which the property is located.

When you follow the bouncing ball

339.2 Definitions
(e) Designated loan means a loan secured by a building or mobile home that is located or to be located in a special flood hazard area in which flood insurance is available under the Act.

(g) Mobile home means a structure, transportable in one or more sections, that is built on a permanent chassis and designed for use with or without a permanent foundation when attached to the required utilities. The term mobile home does not include a recreational vehicle. For purposes of this part, the term mobile home means a mobile home on a permanent foundation. The term mobile home includes a manufactured home as that term is used in the NFIP.

I'm sorry to keep pushing on this subject, I am just having a hard time explaining/justifying these requirements.

Perhaps these situations would be best approached from safety and soundness and due diligence perspectives such as.

>If we know the mobile home is sitting in a flood zone and not permanently affixed, our collateral could be in danger of being washed away.

>How will we monitor these loans to ensure flood insurance is aquired as soon as the mobile home becomes permanently affixed?

You can play the game "the MH is not affixed therefore, it doesn't meet the definition and doesn't require flood insurance", but it's just that - a game. Review the hazard insurance policy for MH's. I've never seen one that didn't require the MH to be tied down (for wind/tornado issues). Do you also exempt the MH from hazard insurance coverage? Maybe you have hazard insurance on the MH, but if it's not tied down, the insurance is not effective.

Also, imagine the MH suffers flood damage. Can you imagine the borrower saying "how come you didn't tell me my MH was in a SFHA?" If your defense is "Your MH doesn't meet the definition of a MH, so we didn't require it or notify you". In our society of "protecting consumers" and "victim mentality", I'd say "good luck!"

Here's what I suggest:
1. Treat all MH's the same. If it's in a SFHA, give the notice and require insurance.
2. If the insurance agent tells them they don't qualify for Flood Insurance because the MH isn't tied down, tell them to get it tied down so they qualify for the insurance. Remember, it's required for hazard insurance too.

Is the property in a participating community? The flood plain management rules require a permanent foundation.

Thanks to all three of you!

If our loan is secured by a mobile home we will do as David says and require the mobile home to be tied down and require the appropriate insurance poilcies.

Kathleen, can you point me to this requirement?

The second scenario we need to address is when we take Land Only.
As discussed in this thread - Exclude the home as collateral to avoid flood - we have made it clear to our lenders that if a permanent structure exists then flood requirements apply, even if the land alone is sufficient for collateral.

However, if there is a mobile home on the land that is not on a foundation and it is still titled as Personal Property, we wouldn't require it to be on a foundation and wouldn't require flood insurance.

Do we need to require it to be permanently affixed before we can take the land as collateral even though we don't need/want the mobile home as collateral?

Example- Rancher has a river pasture with an old mobile home that they use once a year while branding.

Go right here to the definition of building, also see the very first post in this thread way up top.

http://www.fema.gov/national-flood-insurance-program/definitions

Also see my post above where I linked to a flood plain management manual.

Do we need to require it to be permanently affixed before we can take the land as collateral even though we don't need/want the mobile home as collateral?

Example- Rancher has a river pasture with an old mobile home that they use once a year while branding.

You should have the tax records checked.

If the MH (depending on state law) is still titled and taxed as personal property you would not need flood insurance if you do not take the MH (title) as security.

If the MH is being taxed as part of the real estate (real property) then it will generally be considered an improvement to the real property and by virtue of your mortgage you will have the MH as security and flood insurance would be required if located in a SFHA. However before this happens the MH is usually on a foundation with the wheels removed, but again it could depend on state law.

Thanks Dan!

Thanks for all your help and I apologize for being so difficult. We had a couple of issues with Flood in our last exam so I am in the midst of a major procedure rewrite and want to make sure I have all of my bases covered.

Thinking back to a loan secured by a mobile home, this quote from David is kind of scaring me –

“Maybe you have hazard insurance on the MH, but if it's not tied down, the insurance is not effective.”


How do you ensure that a mobile home is on a permanent foundation?

Is there a definition of permanent foundation somewhere?

This describes the need for and how to anchor, but not what a permanent foundation is. FEMA Mobile Home Definition/Description