We are securing a loan with 12 rental properties, 2 of which are in SFHA. In determining the amount of flood insurance coverage, I know that it is the lesser of:
1) Loan Amount ($1,000,000);
2) Maximum Insurable under FEMA ($250,000);
3) ACV/RCV value ($135,000 - amount on just one of the properties)
I would say that we are required to have at least $135K in flood insurance coverage on this particular property. The property only carries $110K in coverage. Our compliance officer is approving the use of the release price of the property which is $60K as our flood insurance minimum requirement. He comes up with the release price by taking the value arrived at by our internal evaluation, $80K X .75 = $60K.
Have I missed something recently where we can use an amount other than the loan amount as one of the three tests?