I have a Flood question on a business purpose loan cash out refinance on a home/lakefront cabin that has a detached garage. Both buildings are in a SFHA. There is no mention in the evaluation of the garage having a bathroom, kitchen, or sleeping space. The loan purpose is cash out refinance. The property was purchased 5/2021 with cash. My question is on the detached structure exemption. Provided the garage is not used for any proven onsite commercial purpose, would it meet the definition of detached structure and be exempted from FDPA since it is located on a property with a residence? Or would the business purpose of the property since it is rental amd the garage would come with the rented house, would that be considered as the garage having a business income purpose and not be exempted from FDPA?
If not exempted, would two flood insurance policies be required, or would it suffice to have coverage noted as “unattached structures” coverage on the home’s flood insurance policy?
The detached structure exemption is only available for a structure used primarily for personal, family, or household purposes. It appears that you have already determined the loan purpose is business. If you can show that the garage is not available for renters, it is only used for owner storage, for example, then you might be able to justify the detached structure exemption.