Do we still need to escrow for flood when escrowing for taxes on a commercial property? Thank you.

Business purpose loans are exempt from the mandatory escrow requirements.

Wanted to make sure! Thank you!

We do not have a policy that states taxes and homeowner's insurance premiums must be escrowed, but we do allow customers to escrow if they choose. We do have a number of escrow accounts. When I am reading the requirement that flood insurance premiums must be escrowed, unless you meet one of the exemptions, I'm having a conversation as to whether or not we meet the small lender exemption for this requirement. Our total assets are less than $1 billion in either of the two prior calendar years; we were not required under Federal or State law to deposit taxes, insurance premiums, fees, or any other charges in an escrow account for the entire term of any loan secured by residential improved real estate or a mobile home; and we do not have a policy of consistently and uniformly requiring the deposit of taxes, insurance premiums, fees, or any other charges in an escrow account for any loans secured by residential improved real estate or a mobile home. The only time taxes and homeowner's insurance premiums are required to be escrowed is if the loan is an HPML. We do have HPMLs, so in those instances the requirement for escrow is followed. Does this prohibit us from attaining the small lender exemption? I'm trying to determine if we are required to escrow flood insurance premiums. Any help is appreciated.

In reference to my post from above, we DO require escrow of taxes, homeowner's insurance and flood insurance when PMI is involved.

In reference to my post from above, we DO require escrow of taxes, homeowner's insurance and flood insurance when PMI is involved.

That kind of shoots down the following statement doesn't it?

"we do not have a policy of consistently and uniformly requiring the deposit of taxes, insurance premiums, fees, or any other charges in an escrow account for any loans secured by residential improved real estate or a mobile home. "

IMO that requirement disqualifies you for the exemption.

Thank you, that is what we were thinking.