Click here to
visit the Federal Emergency Management Agency website.
NFIP
This community participates in the National Flood Insurance
Program (NFIP). The NFIP makes federally backed flood insurance
available for all buildings, whether they are in a floodplain or
not. Flood insurance covers direct losses caused by surface
flooding, including a river flowing over its banks, a lake or
ocean, and local drainage problems.
The NFIP insures buildings, including mobile homes, with two
types of coverage: structural and contents. Structural coverage is
for the wall, floors, insulation, furnace, and other items
permanently attached to the structure. Contents coverage may be
purchased separately provided the contents are in an insurable
building.
Mandatory Purchase Requirement
The mandatory purchase requirement applies to all forms of
federally related financial assistance for buildings located in a
Special Flood Hazard Area (SFHA). This requirement affects loans
and grants for the purchase, construction, repair, or improvement
of any publicly or privately owned building in the SFHA, including
machinery, equipment, fixtures, and furnishings contained in such
buildings.
Financial assistance programs affected include loans and grants
from agencies such as the Department of Veterans Affairs, Farmers
Home Administration, Federal Housing Administration, Small
Business Administration, and Federal Emergency Management Agency.
The requirement also applies to secured mortgage loans from
financial institutions, such as commercial lenders, savings and
loan associations, savings banks, and credit unions that are
regulated, supervised or insured by Federal agencies such as the
Federal Deposit Insurance Corporation and the Office of Thrift
Supervision. It also applies to all mortgage loans purchased by
Fannie Mae or Freddie Mac in the secondary mortgage market.
How it works
Before a person can receive a loan or other financial
assistance from one of the affected agencies or lenders, there
must be a check to see if the building is in a Special Flood
Hazard Area (SFHA). The SFHA is the base (100-year) floodplain
mapped on a Flood Insurance Rate Map (FIRM). It is shown as one or
more zones that begin with the letter "A" or "V".
Copies of the FIRM are available for review in the Wood River
Public Library or at City Hall. Many lenders and insurance agents
also have copies. It is the agency’s or lender’s responsibility to
check the FIRM to determine if the building is in an SFHA,
although the City of Wood River does provide assistance.
If the building is in a SFHA, the agency or lender is required
by law to require the recipient to purchase a flood insurance
policy on the building. The requirement is for structural coverage
equal to the amount of the loan (or other financial assistance) or
the maximum amount available, whichever is less. The maximum
amount available for a single-family house is $250,000.
The mandatory purchase requirement does not affect loans or
financial assistance for items that are not covered by a flood
insurance policy, such as vehicles, business expenses,
landscaping, and vacant lots. It does not affect loans for
buildings that are not in the SFHA, even though a portion of the
lot may be flood-prone. While not mandated by law, a lender may
require a flood insurance policy as a condition of a loan for a
property in any zone on a Flood Insurance Rate Map.
