We have a loan for 318,750.00 with two properties securing at an LTV of 75%, one of these properties is not in a flood zone.

Is calculating the required amount of coverage by taking the full loan amount subtracting the 75% for the property not in the flood zone and using the remaining 75% of the amount as the required amount?

318,750.00 - 150,000= 168,750.00

Nope - lesser of loan amount, insurable value of the building in the SFHA or the maximum flood insurance available on that building.

When you subtract properties not in a SFHA, you are looking at your exposure. The Flood Insurance rules aren't about you and your exposure. They are about you protecting the federal government. This statement might help you understand:

"By requiring adequate coverage, the lender also is protecting the Federal Government’s interests by preserving the assets of agencies that insure the lender’s deposits. [MPFIG – page 29]

As Randy stated, you only consider the buildings in a SFHA and plug that into the insurable value portion of the "lesser of 3" factors to consider.

Thank you David and Randy