In order to comply, the Bank must determine if a building or mobile home being offered as collateral is located in a special flood hazard area and, if so, determine if the area is in a participating or nonparticipating community.
To make a flood zone determination the Bank must:
•find the correct flood map
•find the general location of the subject property on the flood map
•find the specific location of the improvements on the flood map
•identify the insurance risk zone shown on the flood map
The Bank may hire a third party to make the determination. The Federal Emergency Management Agency (“FEMA”) at http://www.fema.gov/flood-zone-determination-companies maintains a list of providers.
All federally insured financial institutions are required to use the Standard Flood Hazard Determination form when determining whether improved real property or a mobile home offered as collateral for a loan is located in an area identified by FEMA as having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968. Use of the form is mandatory. A sample of the FEMA Standard Flood Hazard Determination form is located at the end of this Chapter.
The form may be used in a printed, computerized, or electronic manner. The Bank may obtain the form from FEMA’s website at www.fema.gov.
The Bank is not required to provide a copy of the Standard Flood Determination Form to the borrower although many do this as a courtesy.