Construction Loan Where Land Is In AE Zone

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Question:

We have a construction loan where the vacant land is partially in an AE zone and partially in an X zone. The borrower has sent us a site map showing that the plans are to build in the X zone. Are they still required to obtain flood insurance? Or do we need to wait until construction is complete?

Answer:

The building will be either in or out of the zone. You have to make that determination prior to loan closing and obtain flood insurance as required. If you have the site plans and it shows the building out of the zone, then you should be good to go.