Answer:
by Randy Carey:
It is the lower of the amount of NFIP insurance available on the buildings in the SFHA, the insurable value of the buildings in the SFHA, or the entire loan amount.
Answer:
by Jim Bedsole:
If the insurable value of the property that is in the flood zone is only $50,000, that is going to be the lowest of the three numbers and would be the amount of flood insurance you would require. The loan amount is the second of the numbers and that is $250,000. The maximum amount available under the NFIP is going to be either $250,000 or $500,000 depending on whether it is a dwelling or commercial building. So $50,000 is the lowest of the three.