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FDPA and business condos

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  • #37291
    TheBank
    Participant

    We have a $500,000 flood insurance policy for a business condo building that covers two units. There are four units in the building, but our policy covers two units that our borrower owns. The borrower is a business. The loan amount is $500,000, and the value is $1,170,700. For a business condo, would the maximum available under the NFIP be $500,000 or $1,000,000 due to there being two units? In other words, what is the minimum amount required to meet FDPA compliance? Do we look at the two units separately or together?

    #37300
    kboatwright
    Participant

    The loan amount is $500,000. The maximum amount from FEMA is $1,000,000 (Two general policies at $500,000 each). The value of the improvements is $1,170,700.

    To be in compliance you must obtain at least $500,000 in coverage, which is the loan amount. The maximum coverage you could obtain is $1,000,000, assuming each unit is worth at least $500,000.

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