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#2033082 - 08/11/15 09:35 PM Flood Requirements For Mobile Home Park Financing
noelekal Offline
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Joined: Aug 2013
Posts: 116
Texas
Should a bank finance a mobile home park that only rents spaces and which has no ownership interest in any manufactured housing situated on the rental spaces, must flood insurance be required of the loan applicant?

Or, is flood insurance the responsibility of the manufactured home's owner who has chosen to rent space to place his home on a property situated in a flood zone?
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Flood Compliance
#2033098 - 08/11/15 11:52 PM Re: Flood Requirements For Mobile Home Park Financing noelekal
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
What is your collateral? It sounds like you don't have the housing places on each rental space. However, you might have a manager's office.

If your collateral includes any walled and roofed structure, you'll need to comply with the flood insurance requirements pertaining to that structure.
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#2033151 - 08/12/15 02:03 PM Re: Flood Requirements For Mobile Home Park Financing noelekal
noelekal Offline
100 Club
Joined: Aug 2013
Posts: 116
Texas
Thank you David, for your reply.

After putting up this thread, I was sent a copy of the flood map by the loan officer. The rather long and skinny property backs up to a water course. Roughly half the property is in a flood zone but the office and a storage building, situated street side, are not in any flood zone. Only some of the M/H rental sites in the back portion of the property are within the flood zone. No housing is included as collateral on this proposed loan.

One begins to feel a bit like Chicken Little worrying about the sky falling, wondering if some overlooked change in flood regulations requires the lender to compel the borrower to carry flood insurance that protects his mobile home tenants.

I wasn't having any luck yesterday, doing searches online for guidance. The actual regs with their supporting guidance didn't offer clarity for my pea-brain. A couple searches came back here to BOL but even those references were a bit oblique.
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"The further a society drifts from truth, the more it will hate those who speak it."
--George Orwell

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#2033178 - 08/12/15 02:22 PM Re: Flood Requirements For Mobile Home Park Financing noelekal
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
If the property is split between a flood and non flood zone, and the structures that are part of the collateral (office and storage) are not in the flood zone, no insurance is required. If any part, even a corner, of one of those structures touches the flood zone, your loan is covered.

Your loan is not affected by homes place there, even in the flood zone, that are owned by others.
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HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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