Federal Mortgage LawsQuestion 68 of 400
A property securing a federally related mortgage is located in a Special Flood Hazard Area. What must the lender require?
a.That the borrower waive all flood coverage
b.That the property be relocated
c.That the borrower obtain and maintain flood insurance
d.That the loan be denied automatically
Explanation
Under the Flood Disaster Protection Act, a lender making a loan secured by improved real property in a Special Flood Hazard Area of a community participating in the NFIP must require the borrower to obtain and maintain flood insurance. Being in an SFHA does not require denying the loan, only that flood coverage be in place.
Law Reference: Flood Disaster Protection Act / National Flood Insurance ProgramPractice all 400 questions free — no signup required.
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