Good morning,

I am not the expert in Flood regs, so I am hoping a guru can help me out here.
My FI is writing a residential mortgage loan in which the collateral is a condo. The condo association has flood insurance on the condos. It's a $26 million dollar policy.
We are still waiting for the condo questionnaire to come back.

1) If there is enough coverage on the condo association's policy, is my FI allowed to use that for coverage, or does the consumer still have to purchase their own?

2) If the consumer does not have to purchase their own, does the Flood still have to be disclosed on the LE/CD?

Thank you -

How many units are covered by the $26MM policy. Divide that amount by the number of units and that is your insurance number.

Flood insurance premiums would be included in the estimated annual condo association dues.

Perfect. Thank you so much, Randy!

We have a condo association policy that has 42 units in 10 buildings. The flood coverage is $4,702,400 but says "see attached for the break down." So the next page has a listing of primary flood break down by buildings and policies. Our collateral is in Building 8 which has a flood policy break down of $392,000 and this building has 4 units in it.

So which amount do we use to represent the coverage amount of our unit being used as collateral?

Option 1: $4,702,400/42 = $111,961.90
Option 2: $392,000
Option 3: $392,000/4 = $98,000

Also, I would like to note that on the policy in the remarks section it says "Replacement Cost is subject to the policy limit."