We recently determined that a property on an existing loan has been remapped into a SFHA (zone AE). We sent a letter to the borrower advising that flood insurance was needed. The borrower provided a flood insurance policy that was effective in February 2021 (prior to the remapping) that reflects a current flood zone X and a flood risk/rated zone X. The policy is a Preferred Risk Policy (PRP). Does the policy need to reflect the current zone as AE? Do we need to require that the insurance be written for zone AE? I have read multiple threads about zone discrepancies and researched PRP and am unable to come to a conclusion.

Sounds like the flood policy was issued before the remapping, but regardless, since a flood zone or a flood risk zone no longer is even printed on declaration pages since October 1, 2021, I think your questions and concerns are moot.

Thank you - I wasn't sure if the October changes could be considered since the policy doesn't renew until February.

Even before the decision by FEMA to stop printing the flood zones on declaration pages starting Oct 2021, the regulatory agencies basically said that flood zones no longer matter to the lender in the proposed new Flood Q&As issued in June 2020. At this point, I just do not believe it is worth worrying about.

The borrower provided a flood insurance policy that was effective in February 2021 (prior to the remapping) that reflects a current flood zone X and a flood risk/rated zone X.

Putting aside the Risk Zone is no longer required and the June 2020 Q&As; if the borrower had a flood insurance policy in place prior to the property being remapped into a SFHA they would be "grandfathered" into the lower the Risk Zone.

Until the next renewal anyway - then grandfathering goes away under Risk Rating 2.0.

then grandfathering goes away under Risk Rating 2.0.

I missed that in 2.0. Thanks for pointing that out.

Similar situation as above with the current flood zone and risk/rated zone still showing as X - except the flood policy (General Property) renewed in August after the map changes were effective in February. Policy indicates that it is not grandfathered, but that the premium calculation is "Pre-FIRM Subsidized."

Are my zone discrepancy concerns still moot in this scenario? We're on the brink of an exam and just trying to make sure we are adequately covered/documented.

If zones were going to be a problem (before they went away in October 2021) then why did the joint regulators propose the new FAQs that said it was not the lenders problem? If you are concerned that your regulators are going to take a different stance, then just follow Questions 71 and 72 of the current FAQs.