The Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a) requires that projects receiving federal assistance and located in an area identified by the Federal Emergency Management Agency (FEMA) as being within a Special Flood Hazard Areas (SFHA) be covered by flood insurance under the National Flood Insurance Program (NFIP). In order to be able to purchase flood insurance, the community must be participating in the NFIP. If the community is not participating in the NFIP, federal assistance cannot be used in those areas.
Does this project involve mortgage insurance, refinance, acquisition, repairs, rehabilitation, or construction of a structure, mobile home, or insurable personal property?
If so, is the project excepted from flood insurance? There are four statutory exceptions:
In addition, it is HUD policy that flood insurance is not required for a federal project consisting of minor repairs if all aggregated repairs cost less than the National Flood Insurance Program’s maximum deductible of $10,000.
If not, is the structure, part of the structure, or insurable property located in a FEMA-designated Special Flood Hazard Area? Use FEMA’s Map Service Center to make the determination.
If so, the community participating in the National Flood Insurance Program or has less than one year passed since FEMA notification of Special Flood Hazards? For loans, loan insurance or guarantees, the amount of flood insurance coverage must at least equal the outstanding principal balance of the loan or the maximum limit of coverage made available under the National Flood Insurance Program, whichever is less. For grants and other non-loan forms of financial assistance, flood insurance coverage must be continued for the life of the building irrespective of the transfer of ownership. The amount of coverage must at least equal the total project cost or the maximum coverage limit of the National Flood Insurance Program, whichever is less. If the community is not participating, or if its participation has been suspended, federal assistance may not be used for projects in the Special Flood Hazard Area.
The environmental review record should contain one of the following: