Thread Starter: David Dickinson
Title: Re: Flood insurance on C/P loan
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Correct. Once the slab is poured, you can't advance any money until adequate flood insurance is in place. Refer to FAQ #22:
…a lender may allow a borrower to defer the purchase of flood insurance until either a foundation slab has been poured and/or an elevation certificate has been issued, or if the building to be constructed will have its lowest floor below the Base Flood Elevation, when the building is walled and roofed.
…the lender must require the borrower to have flood insurance in place before the lender disburses funds to pay for building construction (except as necessary to pour the slab or perform preliminary site work, such as laying utilities, clearing brush, or the purchase and/or delivery of building materials).
…must have adequate internal controls in place at origination to ensure that the borrower obtains flood insurance no later than when the foundation slab has been poured and/or an elevation certificate has been issued.
If the borrower hasn't already applied for the insurance policy, there will be a 30 day waiting period before the flood insurance is effective.
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