On numerous occasions over the years Congress or the President has temporarily failed to provide funding that allows the Federal Emergency Management Agency (FEMA) to continue the National Flood Insurance Program (NFIP).
Major flooding during the summer of 2017 bankrupted the NFIP again. Congress has been debating the future of the NFIP and has continued the Program with a series of temporary funding measures. There have been lapses along the way.
With the potential lack of availability of FEMA flood policies what option do lenders have? Can loans secured by a building or mobile home located in a special flood hazard area be closed without FEMA coverage?
This manual explores the limited options to FEMA flood policies available to lenders as well as:
- The current status of FEMA flood insurance policies;
- The alternatives to FEMA flood insurance policies; and
- How to document the lender’s decision upon selecting an alternative.