Some provisions of the B-W rule were rolled back until 1/1/2016. What aspects are still due to be implemented in 7/2014>

There are none until further regulations are issued.

yea!

What about increased insurance for multi family properties?

Those are effective June 1st - not in July.

Is it retro active or does it increase upon renewal?

The increased insurance amounts become available on June 1st. If you have eligible properties in which an increase in available flood insurance amounts will cause the properties to be underinsured, you might want to be letting your customers know so they can get the ball rolling on planning for increasing their coverage.

Have the regulators provided any guidance on this?

Nothing new.

The Act and Regulation require a lender to force place flood insurance, if all of the following circumstances occur:

• The lender determines at any time during the life of the loan that the property securing the loan is located in an SFHA;

• Flood insurance under the Act is available for improved property securing the loan;

• The lender determines that flood insurance coverage is inadequate or does not exist;

My compliance team is working on a matter right now regarding a detached structure not used as a residence - think barn in rural Pennsylvania. The Homeowner Flood Insurance Affordability Act of 2014, Sec. 13 permits the exclusion of "any residential property, for any structure that is a part of such property but is detached from the primary residential structure of such propery AND does not serve as a residence." The section does not require the administrator to formulate rules nor is an effective date noted. My take is that the exclusion was effective with the President's signature on March 21st.

Agree or disagree?

Regardless of whether that provision became effective on signing, Frank, it addresses mandatory coverage. That would leave it to the lender, IMHO, to determine whether it will require flood coverage on that barn.

That is what we thought. Thanks John.

Thanks. I was at a conference and not able to reply, so I asked the question hoping Randy would explain that the increased insurance is still going into effect...just to avoid any misunderstandings!

I just got thrown into flood and have not read BW12 or the amendment yet, but I have been searching for June 1, 2014 effective date to see what you guys are talking about and can't find it. Where is that information?

If I understand your comments above - multi-family min ins coverage goes from $250,000 to $500,000 - is that right?

See this 2013 bulletin from the NFIP to WYO companies. http://www.nfipiservice.com/Stakeholder/FEMA2/W-13070.html

They issued some bulletins in 2014 that amended this a bit.
http://www.nfipiservice.com/Bulletin_2014.html

Thank you! That helps a ton!

We have a similar situation with a vacation home and a detached garage and both are in a SFHA. The garage does not include living quarters. Do you think we can take advantage of this exemption for the garage NOW before additional guidance is provided?

Even without this change, the policy on the home will cover one accessory structure:

"Accessory structures are also referred to as appurtenant structures. An accessory structure is a structure which is on the same parcel of property as a principal structure and the use of which is incidental to the use of the principal structure. For example a residential structure may have a detached garage or storage shed for garden tools as accessory structures. Other examples of accessory structures include gazebos, picnic pavilions, boathouses, small pole barns, storage sheds, and similar buildings. National Flood Insurance Program (NFIP) regulations for new construction generally apply to new and substantially improved accessory structures."

They changed the definition of an appurtenant structure?

Where did this quotation come from?

That definition does not equate to coverage. The flood insurance manual makes it clear that the only appurtenant structure to be covered under the 10% rule is a detached garage.

From the General Rules section of the Flood Insurance Manual page GR-4
1. Appurtenant Structures
The only appurtenant structure covered by the
SFIP is a detached garage at the described
location, which is covered under the Dwelling
Form. Coverage is limited to no more than 10%
of the limit of liability on the dwelling. Use of
this insurance is at the policyholder’s option but
reduces the building limit of liability.
Appurtenant structure coverage does not apply
to any detached garage used or held for use
for residential (dwelling), business, or farming
purposes.

http://www.fema.gov/media-library-data/1...08_june2014.pdf

That would be correct. While an assessory structure no longer needs flood insurance under the mandatory purchase rules unless it contain residential living space, they would not be covered under a dwelling policy unless it was a garage.

So, we can stop requiring insurance today on these detached structures (such as sheds, barns, etc)? The word "notwithstanding" makes me nervous.

‘‘(3) DETACHED STRUCTURES.—Notwithstanding any other provision of this section, flood insurance shall not be required, in the case of any residential property, for any structure that is a part of such property but is detached from the primary residential structure of such property and does not serve as a residence.

On March 23 Congress passed the Homeowner Flood Insurance Affordability Act. The Affordability Act revises certain sections of Biggert-Waters. Basically, yes, you can stop requiring coverage on detached structures.

BUT, and it's a big one, for any loans under FNMA, we received the following from their Servicer Support Center earlier this week: Fannie Mae has not released any announcement regarding an update to flood insurance coverage. The law specifically states that lenders may still require flood insurance on detached structures on the subject property. At this time, please ensure all flood insurance policy is in compliance with the Fannie Mae Servicing Guide Part II, Chapter 3: Flood Insurance (01/31/03). Please also ensure that you are in compliance with any state, or local, statutes in regard to flood insurance as well.

We're a FNMA shop so we're keeping status quo with regard to requiring flood insurance on detached structures on every loan here.

I thought the detached structures coverage was part of the Homeowner Flood Insurance Affordability Act (aka Grimm Waters).

If so, what is the effective date of this? Is this effective the date the Grimm Waters Act was signed into law or should we wait for futher guidance?