(d) Exemptions. The flood insurance requirement prescribed by paragraph (c) of this section does not apply with respect to:
(3) Any structure that is a part of any residential property but is detached from the primary residential structure of such property and does not serve as a residence. For purposes of this paragraph (d)(3):
(i) "A structure that is a part of a residential property" is a structure used primarily for personal, family, or household purposes, and not used primarily for agricultural, commercial, industrial, or other business purposes;
(ii) A structure is "detached" from the primary residential structure if it is not joined by any structural connection to that structure; and
(iii) "Serve as a residence" shall be based upon the good faith determination of the member bank that the structure is intended for use or actually used as a residence, which generally includes sleeping, bathroom, or kitchen facilities.
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