We are doing a Heloc on a property that is in Flood Zone A; however, the structure (garage with apartment) itself is not so no insurance is required. I just learned that proceeds from the equity line will be used to start building a camp. Since this is not a construction loan we have not asked for information about where the camp will be located, when they will be building, etc. What is our responsibility? Are we ok if we do not require insurance and just wait until there is a triggering transaction (MIRE) and make a new determination?

If you have a lien on the property and the improvements they will be making are in a SFHA, then your loan is (or will be) secured by buildings in a SFHA. If you have "knowledge" of this, you are to require flood insurance.

Technically, you know about it, so you have knowledge. Therefore, you trigger force placement requirements.

I agree. The challenge is that whether or not it will be in a flood zone depends where on the property they build, and that's the piece we do not know. I'll have the loan officer ask more questions.