Appendix A to Part 22 - Sample Form of Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance
12:1.0.1.1.19.0.27.11.3 : Appendix A
Appendix A to Part 22 - Sample Form of Notice of Special Flood
Hazards and Availability of Federal Disaster Relief Assistance
Notice of Special Flood Hazards and Availability of Federal
Disaster Relief Assistance
We are giving you this notice to inform you that:
The building or mobile home securing the loan for which you have
applied is or will be located in an area with special flood
hazards.
The area has been identified by the Administrator of the Federal
Emergency Management Agency (FEMA) as a special flood hazard area
using FEMA's Flood Insurance Rate Map or the Flood Hazard
Boundary Map for the following community: ___. This area has a
one percent (1%) chance of a flood equal to or exceeding the base
flood elevation (a 100-year flood) in any given year. During the
life of a 30-year mortgage loan, the risk of a 100-year flood in a
special flood hazard area is 26 percent (26%).
Federal law allows a lender and borrower jointly to request the
Administrator of FEMA to review the determination of whether the
property securing the loan is located in a special flood hazard
area. If you would like to make such a request, please contact us
for further information.
__The community in which the property securing the loan is
located participates in the National Flood Insurance Program
(NFIP). Federal law will not allow us to make you the loan that you
have applied for if you do not purchase flood insurance. The flood
insurance must be maintained for the life of the loan. If you fail
to purchase or renew flood insurance on the property, Federal law
authorizes and requires us to purchase the flood insurance for you
at your expense.
• At a minimum, flood insurance purchased must cover the
lesser of:
(1) the outstanding principal balance of the loan; or
(2) the maximum amount of coverage allowed for the type of
property under the NFIP.
Flood insurance coverage under the NFIP is limited to the
building or mobile home and any personal property that secures your
loan and not the land itself.
• Federal disaster relief assistance (usually in the form of a
low-interest loan) may be available for damages incurred in excess
of your flood insurance if your community's participation in the
NFIP is in accordance with NFIP requirements.
• Although you may not be required to maintain flood insurance
on all structures, you may still wish to do so, and your mortgage
lender may still require you to do so to protect the collateral
securing the mortgage. If you choose not to maintain flood
insurance on a structure and it floods, you are responsible for all
flood losses relating to that structure.
Availability of Private Flood Insurance Coverage
Flood insurance coverage under the NFIP may be purchased through
an insurance agent who will obtain the policy either directly
through the NFIP or through an insurance company that participates
in the NFIP. Flood insurance that provides the same level of
coverage as a standard flood insurance policy under the NFIP may be
available from private insurers that do not participate in the
NFIP. You should compare the flood insurance coverage, deductibles,
exclusions, conditions, and premiums associated with flood
insurance policies issued on behalf of the NFIP and policies issued
on behalf of private insurance companies and contact an insurance
agent as to the availability, cost, and comparisons of flood
insurance coverage.
[Escrow Requirement for Residential Loans
Federal law may require a lender or its servicer to escrow all
premiums and fees for flood insurance that covers any residential
building or mobile home securing a loan that is located in an area
with special flood hazards. If your lender notifies you that an
escrow account is required for your loan, then you must pay your
flood insurance premiums and fees to the lender or its servicer
with the same frequency as you make loan payments for the duration
of your loan. These premiums and fees will be deposited in the
escrow account, which will be used to pay the flood insurance
provider.]
__Flood insurance coverage under the NFIP is not available for
the property securing the loan because the community in which the
property is located does not participate in the NFIP. In addition,
if the non-participating community has been identified for at least
one year as containing a special flood hazard area, properties
located in the community will not be eligible for Federal disaster
relief assistance in the event of a Federally declared flood
disaster.
[80 FR 43244, July 21, 2015]