If you are buying a home in certain U.S. states there is an extra factor to consider — other than if your ideal home hasl amenities like a backyard that’s great for barbecues, or a chef-ready kitchen. Especially if your home is near water, you’ll want to find out if your potential dream house is located in a flood hazard area county. If it is, then what does that mean? There are special purchase requirements for a home in a flood hazard area, and factors to keep in mind for the future. We’ve outlined a few basics to get you started, so you know what to look for when buying a home.
What is a special Flood Hazard Area?
According to FEMA, 13 million homeowners live in the high-risk 100-year flood plain, which means they face a 1% chance of flooding during any given year. You’re in a high-risk flood zone, or Special Flood Hazard Area (SFHA), if your flood zone on FEMA’s map has a code starting with A or V. (This also is referred to as the “base flood” or “100-year flood.”) You’re at moderate flood risk (having a 0.2 percent annual chance of flooding) in Zone B or shaded Zone X. If you live in an area of minimal flooding, you’ll fall in Zone C or unshaded Zone X. You can look up your flood zone by address via FEMA’s Flood Map Service Center. It’s likely that the homeowner for your potential new house will share this information upfront, but it’s a good idea to do your own research.
Flood Hazard counties
According to the Pew Trust, in a report about flooding and the risk to public schools, five of the most at risk flood zone areas in the United States are Monroe County, Florida; Hyde County, North Carolina; Cameron Parish, Louisiana; Poquoson City, Virginia; and Tyrrell County, North Carolina. However, California, Texas, and New Jersey also have counties that are at risk, and your best bet is to consult the FEMA flood map.
What are the purchase requirements?
If your new home has a special flood risk, you’ll be paying for flood insurance on top of your regular homeowners policy. Under federal law, people with homes in high-risk areas with mortgages from federally insured or regulated lenders (this includes most nationally-known financial institutions) must have flood insurance. However, lenders can, at their discretion, require flood insurance for mortgages on homes located in low- to moderate risk areas. The average homeowners flood insurance premium under the program is approximately $700 a year.
What do I need to know after I’ve decided to buy?
Keep in mind that just because your home is at risk, doesn’t mean that it will flood while you are living there. However, it is still a risk, and you can ask a seller to help foot the bill for the added insurance costs that come with buying a house in a flood zone area. It’s not uncommon for sellers to offer buyers a one- to two-year home warranty to cover unexpected issues that may arise with the home’s main systems and components. Similarly, a seller could offer to discount a buyer’s flood insurance costs for a year as an incentive to purchase the property, either through an adjustment to the purchase price or credit at closing.Like What You See? Share the Story!