Have a new loan app to purchase a property. Per our determination, the property is in a flood zone. However, we received the flood insurance application and the zone being used is C. Per the agent, the property is being Grandfathered. I am not very familiar with this rule, so I am trying to read up on it. I know in the Q&A, it says if there is a discrepancy due to the rule, we are fine. However, we have to substantiate the finding. I guess my question/s is/are:
1. What must we do on our end to substantiate what the agent is telling us?
2. Do we have the insurance provider change the zone until we substantiate (not sure how long this should take) so as to not hold up closing?
3. Does the rule even apply to purchase transactions?