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Flood coverage on construction

Answered by: 

Question: 
Construction loans can be difficult. Does the proposal address these?
Answer: 

Yes, in short the lender needs to manage the process and mitigate the risk. In part, one Q&A addresses a construction loan and a problem with an elevation certificate. The builder needs to have a provisional rating in advance, and if the lender requires the borrower to have flood insurance in place before any disbursement to pay for building construction, the lender should have adequate controls in place to ensure the borrower obtains flood insurance no later than 30 days prior to disbursement of funds to the borrower due to FEMA’s removal of the 30-day waiting period waiver.

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Flood Changes on the Horizon

First published on 08/16/2020

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