[dcsluder1]

Can someone help point me in the right direction to answer this. We modified an existing loan and gave them more money. Instead of pulling a new flood determination, we were relying on the previous one. The question is does the customer need to sign acknowledging the property is in a flood zone, or can we rely on the previous one?

[rcooper]

Each time you make, inrease, extend, or renew a loan you’re required to determine if the property is in a special flood hazard area. You may rely on an existing determination if it isn’t more than seven years old, is on a SFHDF, and there have been no map changes. You’ll want to make sure the life of loan monitoring is extended to cover any modification of the term of the existing loan or to cover a new loan on the same property. You will need to provide a new Special Flood Hazards Notice to the borrower even if you are using an existing determination.

[Anonymous]

Since the loan is being renewed and the borrower already has flood insurance and is aware they are in a flood zone, are we OK to provide the notice at closing?

[jholzknecht]

You still must provide the Special Flood Hazard Notice a reasonable time before completion of the transaction. Since flood insurance is already in place providing the notice at closing, before the documents completing the renewal are signed, would be a reasonable time. Some examiners might argue the point, but you should prevail. To avoid the argument provide the notice a reasonable time before completion.

[ashdeep11]

Renewing or modifying an existing loan with flood insurance safeguards against potential property damage and financial loss. It’s a proactive measure to mitigate risks, ensuring continued coverage and compliance with lender requirements. This prudent decision offers reassurance and protection, especially in flood-prone areas. lic premium calculator

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