We are considering taking an assignment of a land contract on a rental property as additional collateral for a home purchase.

We have done the flood check on the home that is being purchased. Do we need to do a flood check on the assignment of land contract as well?

If you are only taking an assignment of the note, no. From the FAQs.

42. If a borrower offers a note on a
single-family dwelling as collateral for a
loan but the lender does not take a
security interest in the dwelling itself, is
this a designated loan that requires
flood insurance?
Answer: No. A designated loan is a
loan secured by a building or mobile
home. In this example, the lender did
not take a security interest in the
building; therefore, the loan is not a
designated loan.


However, if you take an assignment of the mortgage then your loan is now secured by the mortgage and you would have a designated loan.

Thank you, Dan!