National Flood Insurance Program

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Flood InsuranceThe National Flood Insurance Program (NFIP) is aimed at reducing the impact of flooding on private and public structures. This is achieved by providing affordable insurance for property owners and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of Risk Insurance in general, and National Flood Insurance in particular.

Additional Information about the National Flood Insurance Program (NFIP) can be found at the FEMA website at https://www.fema.gov/national-flood-insurance-program.

The flood insurance requirement is based on the lender’s determination that a property is located in a Special Flood Hazard Area (SFHA) on the current Flood Insurance Rate Map (FIRM). In accordance with the Flood Disaster Protection Act of 1973, and the National Flood Insurance Reform Act of 1994, flood insurance is required for all structures located in or touching a SFHA that carry a mortgage loan backed by a federally regulated lender or servicer. If the lender determines that the structure is located within the SFHA and the community participates in the National Flood Insurance Program (NFIP), the borrower is notified that flood insurance will be required as a condition of the loan.

For those property owners that believe their structures are not located in or touching a SFHA, it is recommended that they pursue a Letter of Map Amendment (LOMA). LOMA is a letter from FEMA stating that an existing structure or parcel of land is not located in a SFHA. The issuance of a LOMA eliminates the federal flood insurance purchase requirement as a condition of federal or federally backed financing; however, the mortgage lender retains the prerogative to require flood insurance as a condition of financing, regardless of the location of the structure. There is no fee for FEMA’s review of a LOMA request, but the requester is responsible for providing site-specific property information, which may require a surveyor to be hired to complete an Elevation Certificate.

Often the lenders use flood determination companies, and these companies might flag a loan as requiring flood insurance when part of the property is located in the SFHA but the actual structure is not. In this case it is recommended to pursue an Out-As-Shown Letter of Map Amendment (LOMA), which is a comment by FEMA that the structure is out of the floodplain, as shown on the FIRM.

Additional information on LOMAs and the application process is available from the FEMA website at https://www.fema.gov/letter-map-amendment-letter-map-revision-based-fill-process .
For assistance with the completion of the LOMA and for all flood mapping questions, you can refer property owners can refer to the FEMA Map Information exchange (FMIX) website at: https://www.floodmaps.fema.gov/fhm/fmx_main.html