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#2183229 - 06/26/18 08:31 PM 1 Property, Multiple Buildings, Only 1 in SFHA
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
We have a farm loan secured by a large piece of land with multiple buildings on it. There is a cattle barn that clearly lies in the flood zone, while the other 2 barns and 4 single wide mobile homes do not.

Loan amount is 113k
Land is valued at 120k
Barns valued at 25k
The mobile homes weren't included in the valuation of the property.

Am I correct in telling my lender that we will need 113k in coverage? Does it matter that there is only one building that is actually in the flood zone? Our lender is saying that multiple insurance agents have refused to write the policy.

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Flood Compliance
#2183230 - 06/26/18 08:38 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
You need the lesser of:

The loan balance
The insurable value of the property located in the SFHA
The maximum available through the NFIP for the property type
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2183231 - 06/26/18 08:42 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA Dan Persfull
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
Does it matter that only 1 building on the entire property is in the flood zone?

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#2183236 - 06/26/18 08:54 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
Dan Persfull Offline
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Dan Persfull
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Posts: 47,517
Bloomington, IN
Only the building located in the SFHA would require flood insurance coverage and only its value would be considered in determining the minimum required flood insurance coverage.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2183249 - 06/26/18 09:37 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA Dan Persfull
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
Thanks, Dan. Just curious...is this stated in the flood regulation?
Last edited by wellscr; 06/26/18 09:37 PM.
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#2183251 - 06/26/18 09:51 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Directly - no, but:

(c) Requirement to purchase flood insurance where available—(1) In general. A member bank shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan.The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act.

If the building is not is a SFHA, flood insurance is not required. The maximum limit of coverage available is the lesser of the insurable value or the maximum available.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2183262 - 06/27/18 12:40 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Here's a spreadsheet that will help determine the minimum required coverage.

https://www.bankersonline.com/tools/151072
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2183279 - 06/27/18 01:41 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA Dan Persfull
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
Thanks so much for your help!

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#2183292 - 06/27/18 02:28 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA rlcarey
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
Thanks, Randy!

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#2183293 - 06/27/18 02:37 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
CRAzy_lady Offline
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Joined: Dec 2012
Posts: 56
One more question, just to be clear...(I should have included this information in my initial post. Apologies.)

This property is all on one flood determination, so our flood cert shows that the property is in a SFHA. Does this make a difference? We have the flood map from the flood cert company, so we can show that the cattle barn is the only structure in the SFHA.

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#2183296 - 06/27/18 02:45 PM Re: 1 Property, Multiple Buildings, Only 1 in SFHA CRAzy_lady
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
If any portion of the property plots within a SFHA then the whole property will be reported as being in the flood plain.

The map from the vendor that shows the location of the buildings on the property will suffice as documentation for which buildings are located in the SFHA and which ones aren't.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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