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#2174301 - 04/19/18 05:38 PM 2 buildings 1 owner
ahkcompliance Offline
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Midwest
We have a borrower who is buying two buildings that are located next to each other. Both have their own address. I told the lender we need two policies. The lender talked to the agent and the agent said he normally writes one policy and lists both properties on the policy each with an insured amount. From what I get from the NFIP, two polices are needed.

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Flood Compliance
#2174312 - 04/19/18 05:59 PM Re: 2 buildings 1 owner ahkcompliance
David Dickinson Offline
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Central City, NE
You're right. 1 NFIP policy per building. The only exception is a detached garage (on a dwelling policy).
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#2174334 - 04/19/18 06:35 PM Re: 2 buildings 1 owner ahkcompliance
ahkcompliance Offline
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Midwest
Would it matter if they share a wall and are connected?

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#2174342 - 04/19/18 06:45 PM Re: 2 buildings 1 owner ahkcompliance
rlcarey Offline
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Galveston, TX
Depends: Single Building. A building that is separated from other buildings by intervening clear space or solid, vertical, load-bearing division walls.

Also, is the agent issuing NFIP policies or private policies. A private policy might cover more than one building. There are no provisions on the NFIP insurance application to apply for insurance on multiple buildings.

Property Location:

For an address with multiple buildings at the same location, describe the one building to be insured (barn, silo, etc.). Submit a sketch showing the location of the insured building to assist the NFIP in matching the policy number to the specific building insured.
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#2179755 - 05/25/18 01:30 AM Re: 2 buildings 1 owner rlcarey
theloanbug Offline
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If there are 2 dwelllings on same piece of property does both dwellings have to have separate flood policies? Do we do 2 flood disclosures notices and 2 flood disclosures? If we have to do separate policies do both policies have to cover the amount of the loan?
The appraiser called it an accessory dwelling. The address is the same for both dwellings.

Thanks

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#2179763 - 05/25/18 11:11 AM Re: 2 buildings 1 owner ahkcompliance
rlcarey Offline
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Galveston, TX
Separate buildings needs separate policies. You add the policies together to get to your our minimum coverage requirement.
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#2179764 - 05/25/18 11:21 AM Re: 2 buildings 1 owner rlcarey
theloanbug Offline
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Ok, thank you.

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#2179766 - 05/25/18 11:30 AM Re: 2 buildings 1 owner ahkcompliance
Adam Witmer Offline
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To expand on what Randy said, the (now rescinded) Mandatory Purchase Guidelines did a pretty good job of explaining this:

"A separate SFHDF is required for buildings on adjacent properties. However, if a single property contains multiple buildings, a listing of buildings on the parcel can be attached to the SFHDF. Only one building may be insured under one NFIP policy. Each building securing a loan must be covered by a separate policy."

Also:
"For multiple buildings, the lender must ensure that a separate flood insurance policy is provided for each building requiring coverage. The NFIP allows one policy per building."
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#2179824 - 05/25/18 03:46 PM Re: 2 buildings 1 owner Adam Witmer
theloanbug Offline
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The property has 2 dwellings with different address. Example: 200 e ash and 200 1/2 e ash. 200 1/2 e ash is like a guest house. Do I do 2 different notices to customer and 2 different SFHDF? These property will have 1 abstract and 1 appraisal.

Thanks,

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#2179825 - 05/25/18 03:55 PM Re: 2 buildings 1 owner ahkcompliance
rlcarey Offline
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Galveston, TX
There is no current guidance that suggests you need more than one FHD or more than one notice.

25. What are a lender’s requirements under the Regulation for a loan secured by multiple buildings located throughout a large geographic area where some of the buildings are located in an SFHA in which flood insurance is available and other buildings are not? What if the buildings are located in several jurisdictions or counties where some of the communities participate in the NFIP and others do not?

Answer: A lender is required to make a determination as to whether the improved real property securing the loan is in an SFHA. If secured improved real estate is located in an SFHA, but not in a participating community, no flood insurance is required, although a lender can require the purchase of flood insurance (from a private insurer) as a matter of safety and soundness. Conversely, where secured improved real estate is located in a participating community but not in an SFHA, no insurance is required. A lender must provide appropriate notice and require the purchase of flood insurance for designated loans located in an SFHA in a participating community.
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#2179838 - 05/25/18 04:37 PM Re: 2 buildings 1 owner rlcarey
theloanbug Offline
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Do I list both addresses on the notice?

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#2179840 - 05/25/18 04:44 PM Re: 2 buildings 1 owner ahkcompliance
rlcarey Offline
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Galveston, TX
I don't see why you would not or could not.
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#2179844 - 05/25/18 05:00 PM Re: 2 buildings 1 owner rlcarey
theloanbug Offline
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Ok, I realize this is not the area for this question, but do I list both properties on the LE? Thanks for always being so helpful


Thanks

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