Have you recently been mapped into a FEMA floodplain?
Don’t panic, there may be options.
When FEMA maps your home into a Special Flood Hazard Area (SFHA) it’s because the calculated Base Flood Elevation (BFE) suggests that your home, based on surrounding topography, is in an area with an increased risk of flooding. Or, also defined as the 100 year floodplain – or has a 1% risk of flooding in any given year.
[SFHA – A Special Flood Hazard Area (SFHA) is an area identified by the United States Federal Emergency Management Agency (FEMA) as an area with a special flood or mudflow, and/or flood related erosion hazard, as shown on a flood hazard boundary map or flood insurance rate map.
BFE – The computed elevation to which floodwater is anticipated to rise during the base flood. Base Flood Elevations (BFEs) are shown on Flood Insurance Rate Maps (FIRMs) and on the flood profiles. The BFE is the regulatory requirement for the elevation or floodproofing of structures. The relationship between the BFE and a structure’s elevation determines the flood insurance premium.]
That 1% risk in any given year may seem low but, statistically speaking, if you live in the same home for the life of a 30 year mortgage you have a 1 in 4 (26%) chance of being flooded. That’s why you are considered to be in a ‘high risk’ area.
However, not all property owner risk is equal. Why?
FEMA does not manage the SFHA at the property level when establishing floodplain boundaries. So, if you think your property has been inappropriately drawn into the floodplain there are a series of steps that can be taken:
1) Acquire an Elevation Certificate
2) Review the Elevation Certificate to determine: Does the property qualify to request removal from the floodplain?
3) If ‘YES’ to #2 above, submit to FEMA requesting removal of the structure/property from the SFHA
4) Wait for FEMA Flood Zone Determination Letter informing you of the decision
In the meantime, if flood insurance is required by your lender, take advantage of ‘Newly Mapped’ program rates rather than allowing the lender to provide force-placed coverage. Force placed coverage is typically provided by the lender at a cost of $2400-$3600 annually while ‘Newly Mapped’ coverage is only $475 as of the date of this post.
‘Newly Mapped’ coverage is available as an option for 12 months from the date of the FEMA map revision. However, a lender is required to implement force-placed coverage 45 days after their initial notice to you that the property has been placed in an SFHA. So, don’t allow the lender to provide force-placed coverage thinking you have plenty of time to take advantage of the ‘Newly Mapped’ program.
Not only is force-placed coverage expensive, but it can be difficult to get the lender to refund the force-placed premium even if you are able to get out of the floodplain within 12 months of the FEMA map revision date.
Have questions or need assistance with any of the above? Give us a call, we can help!