FHA & FLood Zone

[Kelley Leigh]

I have a property located in Flood Zone A9. Should I contact the lender first in this case? Will FHA even accept a property in a flood zone? Thanks for your help!

 

[Jerry Bone Jr]

I have a property located in Flood Zone A9. Should I contact the lender first in this case? Will FHA even accept a property in a flood zone? Thanks for your help!

Why would you contact the lender first? Just do the appraisal. Why do you care if FHA will accept a property in a flood zone? Just do the appraisal.
Your job is to report the facts & complete the appraisal. Someone else will approve or disqualify the property/loan/borrower.

 

[hastalavista]

I have a property located in Flood Zone A9. Should I contact the lender first in this case? Will FHA even accept a property in a flood zone? Thanks for your help!

Kelley-

Your question is not inappropriate. There are certain circumstances that require the FHA appraisal process to stop when the appraiser discovers certain information. Flood Hazard zones are not one of them.

Such properties are generally acceptable for FHA insurance. They will need to have the necessary flood insurance. Ensuring that the property has the flood insurance is the lender's responsibility. Accurately reporting that the subject is in a flood hazard zone is the appraiser's responsibility.

I'll tell you what someone who knows a lot more than I do about FHA guidelines tells me when I ask him a question: "It is in the handbook" (fortunately for me, he gives me the answer first:laugh.

Good luck!

 

[Julie Shockley]

Have just been doing some reading of the HUD 4155.2 which has recently been updated/revised. Chapter 4 (Property Valuation and Appraisals), Section 3 pertains specifically to Flood Areas.

 

[RSW]

I have to agree with Denis. I would not notify the lender and would complete the appraisal and disclose the flood map information along with a copy of the FIRM.

 

[CANative]

An exception would for manufactured homes. The finished grade elevation beneath the manufactured home must be at or above the 100-year return frequency flood elevation.

This might be a case for a reject and the appraisal would be done as is. But the lender should be notified... IMO.

 

[RSW]

An exception would for manufactured homes. The finished grade elevation beneath the manufactured home must be at or above the 100-year return frequency flood elevation.

This might be a case for a reject and the appraisal would be done as is. But the lender should be notified... IMO.

That is true!