From what I understand, a bank can use a previous flood zone determination if the loan is increased or extended or renewed. However, the flood zone determination cannot be more than seven years old.

If the bank MAKES a loan, a new flood zone determination must be obtained unless the bank already holds the security, i.e., the customer now wants a second mortgage on their home and we already have the first, same lender/same property. In this case, the old flood zone determination can be used.

I have two questions:

1. Does the exception to obtaining a new determination apply to inside refinances as well as second mortgages? It's still same lender/same property.

2. Does the seven year rule apply to same lender/same property loans? Seems to me that if there is life of loan coverage, then a new determination wouldn't be necessary even if it's more than seven years old.

1) The same lender, same property scenario can be treated as a renewal. Two commenters pointed out that pursuant to section 1365 of the 1968 Act, a lender cannot rely on a previous determination set forth on a SFHD form when it makes a loan, only when it increases, extends, renews or purchases a loan. The agencies agree with this interpretation of section 1365 of the 1968 Act but note that subsequent transactions by the same lender with respect to the same property will be treated as renewals and will require no new determination. This quote is from the Federal Register

2) Please review this thread for a similar discussion.

Thanks Andy. This is one of those misunderstandings that seems to creep up about every 6 months. Yet I can't blame tmf as the regulation is poorly worded. Why can't they just say it plainly in the regulation?

Thanks Andy, thanks David. I understand now. It doesn't make much sense, but who am I to argue with FEMA.