[TERRI]

Hi, We have a real estate loan in a flood zone but it is in a non-participating community so flood insurance is not available. Do we need to require flood insurance?

Thanks

[rcooper]

Since it is a non-participating community flood insurance through NFIP is not available and therefore you do not have to require it under the flood regulations. However, as the lender, you may still require it (through a private provider) to cover your collateral.

You will still need to provide the notice. The regulations say when institution makes, increases, extends, or renews a loan secured by a building or a mobile home located or to be located in a special flood hazard area, the FDIC-supervised institution shall mail or deliver a written notice to the borrower and to the servicer in all cases whether or not flood insurance is available under the Act for the collateral securing the loan.

[Author]

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