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Topic 8. Special Flood Hazard Area
October 18, 2019
This Chapter has been revised in its entirety.
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a. Flood Insurance
Properties located in a FEMA Special Flood Hazard Area (SFHA) must be covered by a flood insurance policy. Properties located in a SFHA are not eligible if flood insurance is not available.
b. Regular Flooding
Based on the appraiser’s knowledge of the market area, properties that are subject to regular flooding are not eligible, whether or not the area has been designated an SFHA.
c. Verification of Flood Zone
While appraisers must provide flood zone information on the appraisal report, flood zone maps do not typically indicate the location of specific properties. Lenders are responsible for verifying the flood zone information.
d. Flood Zones
SFHAs are usually designated Zones A, AO, AH, A1-A30, AE, A99, AR, AR/AE, AR/AO, AR/A1-A30, AR/A, V, VE, and V1-V30. Flood insurance is not required in Zones B, C, X, and D.
e. Excluding Non-Residential Improvements
At the Veteran’s request, non-residential improvements such as detached garages and small sheds may be excluded from the flood insurance policy if they are also excluded from the appraised value. The cost of flood insurance with and without coverage for the detached building should be compared as excluding a detached building may not be worthwhile.
f. Private Flood Insurance
Veterans may elect to obtain private flood insurance instead of obtaining flood insurance through the National Flood Insurance Program.