Have borrower who is the loan process to purchase a condominium. There are five units in each building and there are five buildings. The POA has a policy but I believe it is private insurance. We were presented with one policy for both hazard and flood and the bottom it states that flood insurance is included for $750,000. Our loan amount is $60,000 and the RCV is $90,000. If I take 750,000/25 then that will allocate $30,000 per unit.

Should the borrower obtain a stand alone flood policy for the loan amount of $60,000 since it is the lesser of the three coverage options and the POA does not have a RCBAP?

Is this a blanket policy that is covering all the buildings? Usually a policy is issued for each individual building. I know private policies like this can get a bit dicey though.

Under the location of property on the policy it has the address and then it states "Buildings A,B,C,D,E (25 units)." So, I assume each unit is covered.

We do have a RCBAP! Just received it this morning. However, it covers less than 80% of the building replacement cost. Since there are only two floors on each building, our borrower's unit is on the second floor, would a separate dwelling policy to cover the difference suffice? Or, it is point less since the first floor units are the units that will be destroyed if it were to flood?

What floor the condo is on is meaningless. I sent you a PM.