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Quick Facts for Mortgage Professionals: Flood Certifications

by Susan McCullah

Mar 29, 2016 9:08:08 AM

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check_mark_w_blue_pen.jpgFlood certifications are an essential part of the mortgage process, but how much do most mortgage professionals really know about them? Here are some quick pointers from our flood certifications' vendor, ServiceLink. 

#1: What is a Flood Zone Determination, and why is this service needed?

A Flood Zone Determination (FZD) is an assessment of a property’s risk for flooding as determined by the Federal Emergency Management Agency (FEMA). FZDs are made by locating properties in question on Flood Insurance Rate Maps (FIRMs) or Flood Hazard Boundary Maps (FHBMs) published by FEMA and include such data elements as Flood Zone,Base Flood Elevation or Depth (if determined), FEMA Community and Map information, and the property’s eligibility for flood insurance through the National Flood Insurance Program (NFIP). The Federal Disaster Protection Act of 1973 and Flood Insurance Reform Act of 1994 mandate that lenders determine the need for flood insurance by identifying mortgage properties on federal flood maps and ensuring that coverage is kept in force for the life of the loan. In addition, FZDs are utilized by flood insurance professionals to rate and write insurance policies, and by property appraisers to complete the Uniform Residential Appraisal Report (URAR).

#2: What are "flood zones" and what do they mean?

Flood Zones are geographical areas designated on FEMA flood maps that reflect the risk of flooding in the area. The following Flood Zones are considered Special Flood Hazard Areas (SFHAs) for which mandatory flood insurance purchase requirements apply:
  • Zone A - Areas of 100-year flood; no Base Flood Elevations determined.
  • Zone AE and A1-A30 - Areas of 100-year flood; Base Flood Elevations determined.
  • Zone AH - Areas of 100-year shallow flooding with flood depths of 1 to 3 feet (usually areas of ponding); Base Flood Elevations determined.
  • Zone AO - Areas of 100-year shallow flooding (usually as a result of sheet flow on sloping terrain) with flood depths of 1 to 3 feet. Includes areas of alluvial fan flooding; velocities also determined.
  • Zone AR - Areas protected from flood hazards by flood control structures, such as levees, that are being restored. Upon restoration of subject flood control structures, the AR area will be revised and shown as being protected from the 100-year flood; Base Flood Elevations/Depths may be determined.
  • Zone A99 - Areas to be protected from 100-year flood by Federal flood protection system under construction; no Base Flood Elevations determined.
  • Zone V - Areas of 100-year coastal flood associated with storm waves; no Base Flood Elevations determined.
  • Zone VE and V1-V30 - Areas of 100-year coastal flood associated with storm waves; Base Flood Elevations determined.
The following zones are not considered SFHAs and mandatory flood insurance purchase requirements do not apply; however, FEMA still recommends the purchase of flood insurance for these zones:
  • Zone B - Areas between limits of the 100-year flood and 500-year flood; certain areas subject to 100-year flooding with average depths less than one (1) foot or where the contributing drainage area is less than one square mile; areas protected by levees from the base flood. Also may be represented as "BX", or "Shaded X".
  • Zone C - Areas outside the 100-year floodplain with chance of minimal flooding.
  • Zone D - Areas in which flood hazards are undetermined.
  • Zone "NONE" - Areas in which flood hazards are undetermined and/or no NFIP map is published.
  • Zone X - Areas outside the 500-year flood plain; areas of 500-year flood; areas of 100-year flood with average depths of less than 1 foot or with drainage areas less than 1 square mile; areas protected by levees from 100-year flood. Includes non-shaded areas (equivalent to zone C and may be represented as CX) and shaded areas (equivalent to zone B and may be represented as BX).

Download our complimentary Flood Certification Whitepaper today!

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#3: How does ServiceLink National Flood perform FZDs?

SLNF completes all FZDs using digital and hard copy FEMA Flood Insurance Rate Maps (FIRMs) and Flood Hazard Boundary Maps (FHBMs) in conjunction with geocoding technology, street maps, tax and plat maps, and aerial and satellite photography. SLNF bases all FZDs on the location of each property’s insurable improvements.

#4: How long does it take to get a Flood Zone Determination?

Flood information is processed through our national flood certification database and returned in real-time in most instances. Flood zone determinations that are not completed automatically will be manually researched and are usually returned within 8 hours.

#5: Does ServiceLink National Flood guarantee the accuracy of FZDs?

Yes. Each flood zone determination is backed by an Errors and Omissions policy.

Are you a mortgage professional who needs more information on flood certifications? Contact Data Facts today for a complimentary trial. 


Topics: Mortgage loan, Mortgage, Mortgage Lending, flood certifications

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