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#2225197 - 11/06/19 06:11 PM Purchase of Bare Land to Build Home
iheartcompliance Offline
100 Club
Joined: Jan 2016
Posts: 239
Good Afternoon,

We have received an application for a purchase loan- 20 acres of bare land in which the applicants will construct a home in 6-8 months.
Is it necessary to pull a flood cert. since it is bare land, or should we pull one since we know a home will be built on the 20 acres in the near future?

Thanks!

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Flood Compliance
#2225369 - 11/08/19 06:55 PM Re: Purchase of Bare Land to Build Home iheartcompliance
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
If your loan proceeds will be used to construct the home, then you need to follow the Flood requirements.
If your loan proceeds are only to purchase the land, then you do not have a covered loan.

You could pull one now, but if they are going to get a loan later to build the house, you must pull a SFHDF then. If they are not going to get a loan to build the house, your bare land loan will have a building (eventually). When that happens, you would need to pull a SFHDF.

Pulling one now might be a good customer service issue too. You could inform them that their property has a high risk area, but it's not required and I don't think you should/could pass on the fee to them.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#2225385 - 11/08/19 09:14 PM Re: Purchase of Bare Land to Build Home iheartcompliance
iheartcompliance Offline
100 Club
Joined: Jan 2016
Posts: 239
Thank you for your input, I appreciate it!

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