If a borrower obtains a home equity loan from its first mortgagee that is secured by a secondary lien position and the lender relies upon the original SFHDF, does a flood notice still need to be sent to the borrower?

If the property is located in SFHA, yes. See 339.9.

(a) Notice requirement. When a bank makes, increases, extends, or renews a loan secured by a building or a mobile home located or to be located in a special flood hazard area, the bank shall mail or deliver a written notice to the borrower and to the servicer in all cases whether or not flood insurance is available under the Act for the collateral securing the loan.