How much flood insurance coverage is required?

Business Purpose Loan secured by 12 rental homes, 1 rental home is in a flood zone.

Scenario:
Loan Amount $600,000
Each property is valued at $100,000 for a total value of $1,200,000
Rental Home in a flood zone is valued at $100,000.

When you say valued - I assume you mean actual cost value. If that is the case, then you need $100,000 as that is the lessor of the three. You ignore the properties not in a SFHA.

Ok, for some reason I thought all properties needed to be considered in determining the insurable value.

I think that Randy has answered this already, but I have another example to cite to obtain clarification.

A loan with a current balance of $115,000 is currently secured by 3 residential properties, all of which are in a special flood hazard area. These 3 properties appraised for $50,000 each. Flood insurance is in place for these properties.

The lender wants to modify the loan to advance $100,000 to be used for the purchase of another residence which is not in a special flood hazard area.

As long as the current flood insurance policy provides coverage for the $115,000 current loan balance, is any additional flood insurance required?

The lender has been told that the flood insurance coverage must be at least the amount of the loan, as to be modified to $215,000.

Thank you for your assistance. Is there a specific "chapter and verse" so to speak that addresses this type of situation?

Lesser of the three:

Available insurance = $750,000

Loan Balances = $215,000

Insurable value = $150,000