If a flood hazard determination appears to indicate the improved real estate you’re taking as collateral is located in a flood hazard
zone in a participating community, your borrower will need to procure flood insurance (unless the loan is for $5,000 or less and
the repayment term is a year or less).
There are two other possible ways to avoid the insurance requirement. One is to obtain a LOMA (Letter of Map Amendment)
from FEMA; the other is to qualify for a LOMR-F (Letter of Map Revision Based on Fill).
In terms of criteria for obtaining a LOMA to remove a structure from a Standard Flood Hazard Area, NFIP regulations
require that the lowest adjacent grade (the lowest ground touching the structure) be at or above the Base Flood Elevation (BFE).
To remove the entire lot, the lowest point on the lot must be at or above the BFE.
A LOMR-F, on the other hand, is to be used in circumstances where fill has been added to a property in an effort to raise
the structure or lot to or above the BFE.
NFIP regulations require that the lowest adjacent grade of the structure be at or above the BFE for a LOMR-F to be issued to
remove the structure from the SFHA.
The participating community must also determine that the land and any existing or proposed structures to be removed from the
SFHA are “reasonably safe from flooding.” To remove the entire lot and structure, both the lowest point on the lot and the lowest
adjacent grade of the structure must be at or above the BFE.
If you aren’t familiar with the process, or want to help your customer understand what’s necessary, there’s no better place to
start than with tutorials that have been added to the FEMA web site which are designed to walk you through the application and information gathering processes involved in requesting LOMAs and LOMR-Fs.
There’s even an online tool for completing the forms, although you must actually have the customer print them out and physically
sign and mail the forms for processing.
The May 2004 edition of the Flood Insurance Manual is now online, too. It contains the May 1, 2003 edition and revisions effective
Oct. 1, 2003 and May 1, 2004.
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