How and when can FEMA force a property owner to buy flood insurance?
The Flood Disaster Protection Act of 1973 and the Flood Insurance Reform Act of 1994, as amended, requires those Federal agencies, other than FEMA, that are responsible for overseeing federally-regulated and insured lenders to mandate the purchase of flood insurance for properties located within an area having special flood hazards for the term of the loan.
Most commonly, the mandatory purchase requirement is enforced when a property owner makes, increases, renews, or extends a loan. Additionally, other triggers such as a lender discovering during a review of their mortgage portfolio that a building that should have flood insurance does not or a Flood Insurance Rate Map revision newly maps a home in to an area having special flood hazards. Other examples of when flood insurance purchase is enforced, is following the receipt of Federal disaster assistance, there is an obtain and maintain requirement in order to be eligible for future disaster assistance.
The Federal Emergency Management Agency (FEMA) has the statutory authority to enforce the purchase of flood insurance only as it relates to the approval of FEMA financial disaster assistance for repairs, acquisition or other mitigation purposes when the property is located within areas identified as having special flood hazards and where flood insurance is made available under the National Flood Insurance Act.
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