Got a flood insurance binder today, can the loan close tomorrow?

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Question:

We have been having a terrible time getting our borrower to provide evidence of flood insurance. We are all getting frustrated. Today she finally brought in a binder showing an adequate amount of coverage. Can we close tomorrow?

Answer:

Sorry, you cannot. There is no need to possess evidence of coverage for a particular amount of time prior to loan closing (as long as you have it by closing), but the problem here is the binder. Quotes, Binders, or Certificates of Insurance are not recognized as sufficient evidence of a new policy under the National Flood Insurance Program. You cannot close the loan yet without suffering a flood violation.
There IS a time, however, when the NFIP does recognize a Certificate of Insurance! When is it?
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Learn more about Rebekah Leonard’s Flood 101 – Facts to Keep You Afloat in Deep Waters webinar.