Can I get a VA loan in a flood zone? You may have this question in mind.
Yes, you can get a loan in a flood zone. However, you are required to obtain flood insurance. You need to get a good policy before closing your loan and for the whole duration of the loan. For areas with flood or fire hazards, lenders want to make sure that the home is insured. If you are a borrower wishing to know whether they can get a loan under these specific circumstances, this post is for you.
Can I get a VA loan in a flood zone?
According to the VA loan rules, you should get insurance covering damage in case of a flood or other hazard for that area. A flood has the potential to cause substantial financial damage, so the lender is looking for an additional form of security.
The standard insurance package doesn’t cover the damage in case of a flood. Hence, homebuyers need to purchase a separate policy in case their area is prone to floods. The Federal Emergency Management Agency determines which areas have flood hazards.
What is a flood zone?
A flood zone is a geographic area that is at high risk of floods, defined by FEMA. However, just because the property is located in a flood zone, it doesn’t have to mean that it is in danger. Even though the area hasn’t had a flood for hundreds of years, you will still be required to obtain insurance if the property belongs to a geographic territory marked as a flood zone on the map.
Can I get a VA loan in a flood zone, even if the property isn’t at immediate risk? Buying a property in a flood zone doesn’t have to mean that your property is at high risk. For example, the structure might be located on higher ground. An engineer can assess the area and update the existing flooding map with FEMA.
However, keep in mind that the agency might not cover the whole territory. If the specific program doesn’t cover the area, the agency doesn’t have flooding maps available. For areas that aren’t covered with this program, lenders require you to pay for flood insurance. Or, you should get certification to prove that the specific area isn’t a danger zone.
Flooding insurance requirements
Can I get a VA loan in a flood zone but pay for the insurance when closing? When purchasing property in a flood zone, buyers need to pay for the insurance upfront. However, in some cases, you might be allowed to pay when closing. Potential homebuyers should get insurance from the National Flood Insurance Program or private company.
What happens when you buy a property that isn’t located in a flood zone? Even though your home isn’t located in a flood zone during the buying process, it can become a part of the map in the future. If your property is put on the flood map, you will be required to get flood insurance for the rest of your term.