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6 Things to Know About Buying a Home in a Flood Zone


Written By: Ashley Sutphin
Monday, June 7, 2021

In the United States, floods are the most common natural disaster, but flooding can come from other situations too. For example, if theres new construction on your street, your home can be flooded because of water diversion. Even a clogged storm drain can cause flooding.

There are some places where the risk of floods is higher than others, and these places are referred to as flood zones.

Flood zones are often very attractive places to buy a home because theyre close to water, whether thats the ocean, a river, or a lake.

Flood zones are designated on a Flood Hazard Bounty Map. Geographical areas are given a rating based on the likely flood risk.

The following are some of the key things to know about buying a home in a flood zone.

1. What Are the Zones?

The flood zones are broken down into sub-categories, and these zones determine how much flood insurance might cost, as well as whether or not its mandatory.

A zones are high-risk and are usually located along rivers, streams, and ponds. B or shaded X zones are at moderate risk, and C or un-shaded X zones are low-risk for floods. The designation V is used for very high-risk coastal areas, which could be damaged by waves if there was a storm.

You may also see the term Special Flood Hazard Area or SFHA. This refers to zones that start with the letters A or V, which according to FEMA, have at least a one in four chance of flooding during a 30-year mortgage.

2. Flood Zones Can Change

When youre first looking at a house, you might learn more about the flood zone, but you should also realize the designations can change because of the environment, new construction, or different weather patterns.

3. Can You Get a Mortgage?

If youre using a VA, USDA, Freddie Mac, FHA, or Fannie Mae home loan, you will need to have flood insurance if youre in an A or V-designated zone.

If youre going to get a mortgage from a private lender and youre in a non-SFHA zone, you probably wont be required to get flood insurance, but your lender could recommend it.

4. There Are Benefits of Flood Zones

There are often benefits that come with buying a house in a flood zone, which is why people continue to do it. Again, many of the most beautiful locations in the country are in flood zones, such as low-lying coastal areas.

Even though being in a flood zone could theoretically have a negative impact on the resale of a home, since these properties are usually in very in-demand places, thats not often a problem. Theres a life>

5. There Are Also Risks of Flood Zones

Of course, there are also possible risks of being in a flood zone. If youre required to buy flood insurance, its expensive. Flood insurance also doesnt always cover 100 of the costs to deal with flood damage or rebuild a home.

You could need to evacuate your home quickly if there was a natural disaster, and if thats the case, you might not be allowed to return until local law enforcement gives you the go-ahead. Theres a lot of stress that can come with being in a flood zone, so its not for everyone.

If youre buying a second home, you may not be as worried because you dont live in the home full-time, so you have somewhere to go if something happens.

6. Homeowners Insurance Probably Wont Cover a Flood

The most important thing to know if youre even contemplating buying in a flood zone is that flooding isnt usually covered by homeowners insurance. If youre not in a flood zone you should still consider buying separate flood insurance because the risks of not doing so are significant.

Even in low-risk zones, a burst pipe, for example, could flood your home, and you might be stuck without insurance coverage if you dont have a separate flood policy.



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