We have a commercial customer that is building 16 townhouses. There are 8 units in each building. There are 3 units that are in a flood zone on the map. He has those 3 units insured. Is that adequate? Reading the definition on the FEMA site (see below) under general rules I feel like it is. We have participated part of this loan and the other bank is wanting flood insurrance for both buildings, not idividual units.

Single Building
"To qualify as a single-building structure and be subject to the single-building limits of coverage, a building must be separated from other buildings by intervening clear space or solid, vertical, load-bearing division walls. A building separated into divisions by solid, vertical, load-bearing walls from its lowest level to its highest ceiling may have each division insured as a separate building. A solid load-bearing interior wall cannot have any openings and must not provide access from 1 building or room into another (partial walls). However, if access is available through a doorway or opening, then the structure must be insured as 1 building unless the building is self-contained; it is a separately titled building contiguous to the ground; it has a separate
legal description; and it is regarded as a separate property for other real estate purposes, meaning that it has most of its own utilities and may be deeded, conveyed, and taxed separately."

Not really required under the regulation - but from a safety and soundness perspective I would be insisting.

I would agree, however; the townhomes are being built above elevation. The city would not allow them to be built in a flood zone. FEMA will not review it until the construction is complete.

Thank you for your reply!

If you are in a participating community, one of the requirements is that on any new construction the base floor of any building has to be above the base flood elevation line. Just because that happens, it does not cause the buildings not to be in a SFHA if they are located on property that is within the SFHA. They would still need a LOMA. It is not uncommon for new construction to be rated at the estimated elevation with any adjustments made after final elevation certificates are obtained.