Would flood insurance requirements be triggered for a building in a special flood hazard area if the bank only took a security interest in it using a standard security agreement? (no mortgage or dead is used)

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.


The loan is secured by a building located in a SFHA therefore it meets the definition of a designated loan.

So is the original poster asking if the loan is not perfected (no mortgage or deed), is flood insurance required?

And if that is the case, why even list the property on your security agreement. You basically have an unsecured loan.

So I guess I am confusing content coverage, when you just take a security agreement based on the Consumer Compliance Outlook second Issue 2019 located here https://consumercomplianceoutlook.o...ations-for-flood-insurance-requirements/
It states: According to Question 39 of the Interagency Questions and Answers Regarding Flood Insurance, “flood insurance is required for a building located in the [SFHA] and any contents stored in that building. More specifically, contents coverage is required when the institution has a security interest in the building and its contents and when the contents are within a building located in an SFHA. Therefore, for buildings located within an SFHA, flood insurance on the contents of the building is required if the security instrument lists the building and its contents as security for the loan. The type of instrument used to secure the collateral (for example, a mortgage or a security agreement) does not determine if flood insurance is required. Instead, any instrument creating a security interest triggers flood insurance requirements. Similarly, the lien on the property does not need to be legally perfected for the flood insurance requirements to apply. The purpose of the lien also does not matter. Whether the security interest is taken as the primary source of collateral or as an abundance of caution, the flood insurance requirements are the same.

If you list a building in a security instrument, whether that security interest is perfected or not or even can be perfected, you have an interest in the building. I guess I am having a hard time determining your question.

If I am understanding you correctly the fact that a building is just listed in a security agreement means flood insurance requirements must be meet. Even when there is no perfection of the lien on that building. Is that correct?

That is correct. Whether or not your lien is perfected is not a determining factor.