Two properties taken as collateral on loan, with a third property taken as an abundance of caution. What do the flood rules say with regard to pulling/obtaining a flood determination on a property that is taken as an abundance of caution?

That you obtain a flood determination and flood insurance if necessary.

Flood Insurance Requirements for Lending
Institutions
Basic Requirement
Flood insurance, either issued through the NFIP or from
a private insurance provider, is required for the term of
the loan on buildings or mobile homes when an
institution makes, increases, extends or renews a
designated loan, meaning all three of the following
factors are present:
• The loan (commercial or consumer) is secured by
improved real estate or a mobile home that is affixed to a
permanent foundation (security property);
• The property securing the loan is located or will be
located in an SFHA as identified by FEMA; and
• The community in which the property is located
participates in the NFIP.
The FDPA provides that a regulated lending institution may
not make, increase, extend, or renew any loan secured by
improved real property that is located in an SFHA unless the
improved real property is covered by the minimum amount
of flood insurance required by statute. This includes
situations where a security interest in improved rea property is taken only “out of an abundance of caution.”

About the only "out" you get with such real estate collateral involves the appraisal guidelines.

Thanks JWills! Is this coming from the regulation/act somewhere, if so, can you provide the exact regulatory citation? Thanks!

You have taken a security interest in the property - it secures the loan. An 'abundance of caution" is not going to be located anywhere in the flood regulations.

From 339.2:

Designated loan means a loan secured by a building or mobile home that is located or to be located in a special flood hazard area in which flood insurance is available under the Act.

339.3

(a) In general. An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the building or mobile home and any personal property that secures a loan and not the land itself.

339.6

a) Use of form. An FDIC-supervised institution shall use the standard flood hazard determination form developed by the Administrator of FEMA when determining whether the building or mobile home offered as collateral security for a loan is or will be located in a special flood hazard area in which flood insurance is available under the Act. The standard flood hazard determination form may be used in a printed, computerized, or electronic manner. An FDIC-supervised institution may obtain the standard flood hazard determination form from FEMA's Web site at www.fema.gov.

The ABC property makes the loan secured by a building therefore the loan is subject to the regulation.

As John stated the only out for an ABC property is relief from some of the appraisal requirements.

Here's the link to JWillis' cite:

https://www.fdic.gov/regulations/compliance/manual/5/v-6.1.pdf

Thank you all for the responses! Dan - I appreciate the regulatory citations and references you provide, very helpful (as usual)!!

About the only place you will see an exception for a loan with collateral taken in an abundance of caution is the appraisal rules. And you may want to do some form of evaluation of the RE anyhow, to have an idea whether there is value worth worrying about there.