[lucasta]

We have a borrower purchasing Unit C in a three-unit townhome. The corner of Unit A is in the flood zone. Is our borrower required to purchase flood insurance since no part of their unit is in the flood zone?

Topic

[Kimberly Boatwright, CAMS, CRCM]

Townhomes are treated as individual SFR. If the unit you are taking is not in the Special Food Hazard Area, then the borrower would not be required by Flood rules to get flood insurance. However, as a Safety and Soundness precaution you Institution could consider requiring it to protect your collateral. If you do that you will need to make it a standard practice for consistency.

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