[TheBank]

We have a loan that has been secured by a home and a pole barn not attached where the entire parcel is in a SFHA. We required flood insurance on the home.

The home was recently torn down due to mold. The pole barn remains. Wouldn’t we now be required to get the borrower to obtain flood insurance on the pole barn since there is no residential home loan exemption?

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[rcooper]

I agree, the detached structure exemption wouldn’t apply since it isn’t part of a residential property where there is also a residential structure. Something to consider is the insurable value of the structure and what would insurance pay; you want to avoid under-insuring but you also want to avoid over-insuring (requiring the borrower to purchase more insurance than they would be paid for the property) which could easily happen on a non-residential farm structure. Q&A #9 from the 2011 Flood Q&As talks about this to some extent. 2009 Flood Q&A question #10 discusses alternative approaches for this type of building but that was rescinded in the 2011 version and solely address in #9.

2011: https://www.fema.gov/media-library-data/20130726-1742-25045-5644/interagency_q_as.pdf
2009: https://www.fema.gov/media-library-data/20130726-1742-25045-4927/interagency_q_a.pdf

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