When you have a loan in a flood zone, should a flood notice be signed when a change in terms is done (lowering the interest rate)?

If it did not increase the loan balance or extend the maturity no new notice would be required.

Would you mind clarifying this for me? If you modify/extend/ renew,you are only required to give the Notice again if the loan balance increases OR maturity is extended? Yes or No. If yes, would you happen to be able to cite what page of the manual this would be on?

If you MIRE the loan, you are required to give notice, unless nothing changed and you are within the 7 year period. But, this wasn't your question. Your question was a simple lowering of an interest rate and didn't mention anything about any MIRE circumstances...thus, as Dan said..no notice would be required unless you did more than just lower the rate.

M.I.R.E. stands for Make (not modify), Increase, Renew or Extend.

A change in terms (modification) is not making or renewing a loan therefore unless the change in terms (modification) increases the loan balance or extends the loan's maturity it is not a tripwire.

You must ALWAYS give a new notice when you MIRE a loan secured by improved real estate located in a SFHA. You might be able to rely upon a previous determination, but never a previous notification.

Thank you both for the help!

I have a similar question. The Bank calls a note prior to maturity due to default in terms. It wants to enter into a forbearance agreement giving the borrower 6 months to sell real property and also provide for an additional 3 months if borrower has not sold property at the end of the 6 months in lieu of exercising legal rights including forclosure. One of the pieces of real property serving as collateral for the loan is in a SFHA and Bank already has a determination, signed notice and flood insurance from when loan was originally made.

The maturity date has not been extended nor has the Bank increased the amount owed. Does entering into either the original forbearance agreement or amending it at the end of the 6 months for the additional 3 months mean we have MIRE the loan?

This is very legal. I see your point that you are not extending the original loan, but I would be conservative when it comes to flood insurance requirements. Since the note was called and now you are giving them additional time, I would treat this as an extension. You may be able to rely upon the previous determination, but give a new notice and make sure the correct amount of insurance exists.

You could argue that this may not be needed, but you may have to argue it. If you just treat it as an extension, there's nothing to discuss with examiners.