We are closing a loan next week that requires flood insurance coverage. We received the flood insurance application, during our review we noticed that the effective date is 30 days after the date of purchase/closing. I understand there is a 30 day waiting period in most cases but isn’t there an exemption when closing a new loan on a purchase?
You’re correct there is typically a 30 day waiting period. However, if purchasing flood insurance in connection with making, increasing, extending or renewing a mortgage loan there is not a 30 day waiting period. See this link: https://www.floodsmart.gov/flood-insurance-cost/terms