Federal Mortgage LawsQuestion 89 of 400
Before closing a loan secured by improved real estate, a lender must obtain a determination of whether the property is located in a Special Flood Hazard Area. This determination is documented on:
a.The Loan Estimate
b.A Suspicious Activity Report
c.The appraisal report
d.The Standard Flood Hazard Determination Form
Explanation
Federal flood rules require lenders to complete the Standard Flood Hazard Determination Form (SFHDF) to document whether the property securing the loan is in a Special Flood Hazard Area. This determination drives whether flood insurance is required. The Loan Estimate, appraisal, and SAR serve entirely different purposes.
Law Reference: Flood Disaster Protection Act / National Flood Insurance ProgramPractice all 400 questions free — no signup required.
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