What if a borrower disagrees with his or her lender’s determination that a property is in a flood zone?

If a lending institution is requiring the insurance to meet mandatory flood insurance purchase requirements, the property owners may not contest the requirement if the lending institution has established the requirements as a part of its own standard lending practices. However, if a lending institution is requiring the insurance to meet mandatory flood insurance purchase requirements, the property owner and lender may jointly request that FEMA review the lending
institution’s determination. This request must be submitted within 45 days of the date the lending institution notified the property owner that a building or manufactured home is in the SFHA and flood insurance is required. In response, FEMA will issue a Letter of Determination Review (LODR). The LODR process should be used as a last resort. Before the LODR process is engaged, the property owners should contact their lender and provide them with additional documentation to support their position.

Some lenders reserve the right in their loan documents to require the purchase of flood insurance regardless of the flood zone. Property owners may not contest the requirement to purchase flood insurance if the lending institution has established the requirement as a part of its own standard lending practice.