We have recent notification that several of our customers have had flood map revisions that put them in a SFHA. We are in the process of sending out letters to all customers affected by the map revision that currently have loans with us. There are several customers that even though they are in a SFHA they do not have NFIP insurance Available. Who should we handle the customers where NFIP Insurance is not available?
If the property securing the loan is in an SFHA but the community in which the collateral is located does not participate in the National Flood Insurance Program then flood insurance isn’t required, but you still need to send the Notice of Special Flood Hazards and document receipt – many banks send this via certified mail and retain the signed receipt. Also, for flood positive loans in a non-participating area your bank may, as a matter of policy, require flood insurance if it is available through a private company – that is a safety and soundness decision.