Which statement about flood certification is true?

Which statement about flood certification is true?

• A. Flood Certification is required for every home loan
• B. Flood Certification is optional
• C. Flood Certification is required only for high-risk loans
• D. Flood Certification is never required

Answer: (A)

Flood certification, or flood determination, is used to identify whether a property sits in a FEMA flood hazard area before the loan is approved. Lenders must obtain this determination for virtually all home loans secured by real estate so they know whether flood insurance will be required and to comply with federal rules. If the property is in a flood zone, flood insurance is required as a condition of the loan; if not, flood insurance isn’t required, but the determination still needs to be done to verify the risk. That’s why the statement that flood certification is required for every home loan is the best answer. It isn’t optional, it isn’t limited only to high-risk loans, and it isn’t never required.

Flood certification, or flood determination, is used to identify whether a property sits in a FEMA flood hazard area before the loan is approved. Lenders must obtain this determination for virtually all home loans secured by real estate so they know whether flood insurance will be required and to comply with federal rules. If the property is in a flood zone, flood insurance is required as a condition of the loan; if not, flood insurance isn’t required, but the determination still needs to be done to verify the risk.

That’s why the statement that flood certification is required for every home loan is the best answer. It isn’t optional, it isn’t limited only to high-risk loans, and it isn’t never required.