Regulation H: Standard Flood Hazard Determination Form (7/1/2016)

Additional Information: https://www.federalreserve.gov/boarddocs/supmanual/cch/flood.pdf

Standard Flood Hazard Determination Form

When an institution makes, increases, extends, or renews any loan secured by improved real estate or by a mobile home, it must use the standard flood hazard determination form (SFHDF) developed by FEMA to determine whether the building or mobile home offered as security property is or will be located in an SFHA in which flood insurance is available under the federal flood insurance statutes.

An institution can use a printed, computerized, or electronic form. It must retain a copy of the completed form, in either hard copy or electronic format, for the period of time it owns the loan. FEMA has stated that if an electronic format is used, the format and exact layout of the SFHDF is not required, but the fields and elements listed on the form are required. Accordingly, any electronic format used by an institution must contain all mandatory fields indicated on the SFHDF. The SFHDF is available on the FEMA website at www.fema.gov/media-library/assets/documents/ 225.

Decisions as to the applicability of flood insurance may not be based on an institution’s unilateral determination of elevations at which floods may occur. Official elevation determinations and, therefore, map revisions or amendments, Letter of Map Revision (LOMR) or Letter of Map Amendment (LOMA), respectively, may be performed only by FEMA. Letter of Map Amendment A flood map will occasionally show a property as being in an SFHA, even though the building on the property is actually above the base flood elevation. In practice, flood insurance maps do not reflect every rise in terrain, and there may be instances of high ground inadvertently included in the SFHAs. Nevertheless, lenders are bound by the information shown on the FEMA maps until the map is changed by FEMA.

To resolve such a situation, a property owner can submit elevation materials with a request to FEMA for a LOMA to remove the property from the SFHA. The request must be submitted on the appropriate FEMA application form available at www.fema.gov/flood-mapping-related-forms. Upon receiving a complete application package, FEMA will normally complete its review and issue its determination within four to six weeks. After obtaining a LOMA, a borrower must submit it to the lender for the flood insurance requirement to be waived. The lender has the discretion to continue to require flood insurance if the lender determines it is prudent to do so. 

Reliance on Prior Determination

An institution may rely on a prior flood determination, whether or not the security property is located in an SFHA, and it is exempt from liability for errors in the previous determination if the previous determination is not more than seven years old, and the basis for the previous determination was recorded on the SFHDF. There are, however, some circumstances in which an institution may not rely on a previous determination, such as

• if FEMA’s map revisions or updates show that the security property has been remapped into an SFHA, or 
• if the lender contacts FEMA and discovers that map revisions or updates affecting the security property have been made after the date of the previous determination. 

An institution may also rely on a previous determination, which is not more than seven years old and is set forth on an SFHDF, when it increases, extends, renews, or purchases a loan. The making of a loan is not listed as a permissible event that permits an institution to rely on a previous determination. However, when the loan involves a refinancing or assumption by the same lender who obtained the original flood determination on the same property, the institution may rely on the previous determination, but only if the original determination was made not more than seven years before the date of the transaction, the basis for the determination was set forth on the SFHDF, and there were no map revisions affecting the property since the original determination was made. The same is true for multiple loans made by the same lender to the same borrower secured by the same property. A new determination is required when a loan refinancing or assumption is made by a lender different from the one who obtained the original determination because this constitutes a new loan.