A home purchase loan originated 5 years ago, with a flood determination being obtained at that time and was not in a flood zone. Now we are refinancing, with no new money, for another 5 years. Should we order a new flood determination because the "7 year period" will expire during the life of the refinance?

My guess is to be safe we should go ahead and obtain a new flood determination.

I could be wrong.....but I would take the precautionary side of this and order a new flood.

Nothing wrong with being safe but you may want to review page 33 of the guidelines too.

The question becomes meeting the requirement of insuring that there has not been a map revision since the original determination. While you could do this yourself, it is most likely more efficient to just order a new flood determination.

Would life of loan coverage meet that requirement?

If there was a map revision shouldn't our flood servicer have notified us once the revision was made? We did have life of loan coverage.

Excuse my ignorance, BUT, how do I find out if there has been a map change?

I am still confused on the 7 year rule. If going in to the refinance, my determination is less than 7 years old, BUT my refinance maturity date will exceed the 7 year rule, must I obtain a new flood determination (as long as there were no map changes)?

The seven year rule applies to the date the loan was refinance/renewed. If it is during the term of the loan you do not need to obtain a new flood determination.

Just think of it this way. For all of the 30 year mortgages out there - are banks required to obtain new flood determinations every 7 years. The answer is 'no'.

You can go to FEMA's Web site and look up the map number listed on the SFHDF to see its last revision date.

The maturity of the new loan does not play into the 7 year rule. As long as the determination is not older than 7 years and meets the other 2 requirements then you may rely on that determination for your new loan.

If the loan involves a new note, I would obtain a new flood.

That's perfectly acceptable and a best practice, but it is not required as long it is the same lender, the same property and the determination meets the requirements.

Dan,
I agree with you but how do you reconcile this with the guidance on page 33 of the "guidelines" that says, “A previous determination may not be reused when making a new loan. If the loan is not new, i.e., if the transaction pertains to increasing, extending, renewing, or purchasing an existing loan, the determination can be reused if: A. it is less than 7 years old. B. No new or revised Flood Insurance Rate Map or Flood Hazard Boundary Map has been issued in the interim. C. It was initially recorded on the SFHDF that became effective January 1996".

Read Section V, Question 4 of this document .

FWIW, we resuse flood determinations and our procedure for checking that maps have not been changed is for me to check the FEMA site (here is a link) once a month and inform staff of any changes. That works for us because we have a small lending territory and the maps around here haven't been revised since the late 70's/ early 80's. So everyone gets the monthly "nothing to report" memo.

I completely agree w/Dan. The date of the flood doesn't have anything to do with the term. Think about how many 10 & 15 year (or more) term loans that your bank closes. Obviously, loans with terms for greater than 7 years close all of the time.

The key is the date of the flood and the date of your renewal document (regardless if you are producing a new promissory note or using some other 'renewal/extension' document).