If you have ever obtained a loan on a property, and reviewed your settlement statement break down prior to closing, you’ve probably noticed a breakdown of fees associated with your loan. We don’t normally see some these things when it comes to cash transactions. One of those fees required by most lenders is the flood certification fee. It can sometimes be overlooked, typically the cost is less than $100. So what is it?
Basically, it’s a real estate-related document that outlines the flood zone status of the property. If the lender determines the property is in a flood zone, They will require an additional flood insurance policy (in most cases). The status of the property is subject to re-evaluation. If it is later determined that the flood maps changed, the lender can usually come back at any time and require the additional insurance.
So, if you are obtaining a loan, in most cases you can rest assured that someone will help you with this process. But what if you are paying cash?
There are a number of resources available to help research flood zones. The first place to start, in my opinion, would be the FEMA flood maps service center. There is Interactive map with address search capability to help pinpoint the property in relation to the latest FEMA map that is available. These maps can be amended overtime as topography changes either naturally or as a result of excavation or man-made structures.
Second, most counties have an available map layer that provides some of the same information, or similar information. This can also be a starting point when researching properties in or close to a flood zone.
Third, the US Fish and Wildlife service has a wetland map that was compiled over the past three decades using old infrared satellite technology, and other technologies as they came available. These maps are mostly related to Wetland habitat, though they do depict Wetland areas, and should be considered for development projects, but can also be a good resource for someone doing their own homework.
Finally, what if you want to skip the hard part and simply pay for a flood certification through a third party such as what a lender might do on your behalf? Not a bad idea. Online resources such as CoreLogic offer these services at a minimal cost.
Tayson is happy to provide sources for this information upon request.
