FEMA Flood Map - Major Issues
Your Guide to Navigating Flood Map Issues in the Lake Sunapee Region
Recently FEMA updated their flood maps for the Lake Sunapee Region. Unfortunately some of these new maps show properties in flood zones when they really are not in a true flood zone. This is having a major impact on possible real estate sales in our region. Recently I dealt with this on a house that I sold Sutton NH.
Why is this import? Well if your house is for sale and the buyer is getting financing, the bank is going to require the buyer to get flood insurance. If you have not had an "Elevation Certificate" done that details where your house really is and what the true flood risk is, then the buyers will be charged the maximum amount of flood insurance. This number can be well over $5,000 and is due in full prior to closing! This typically becomes a deal killer for most buyers.
The Sunapee Region Flood Map Solution
Hire an engineering company to complete a full elevation certificate and LOMA (Letter of Map Amendment). This can cost anywhere from $500 to over $3,000! A reason for the potential high cost is if the engineering company does not have a "benchmark" elevation near your house. Engineering companies do not share "benchmark" elevations with each other so you need to call around. After calling numerous firms in the area, I spoke with Paul Dobberstein from Eckman Engineering (please see his contact info below). They have done the majority of flood certificates in our area and their cost for my clients was only $700 which was a relief after I had received quotes from other firms for over $3,000!
This elevation certificate will be submitted to FEMA and provided it proves that your house is not in a flood zone, FEMA will remove it from their flood map. You won't however get any of your money back and it could take up to 90 days to hear from FEMA. The benefit of having this done whether or not you are still in a flood zone is that it allows the insurance company to charge the buyers less flood insurance coverage. If it is proven that the house is not in the flood zone and the buyers have already closed on the house and paid the flood insurance, I have been told that FEMA will credit them back for whatever has been paid for flood insurance provided it is proven that the home is not in a flood zone within the first 12 months of the flood policy.
Another issue that could pop up is that the buyers need to close on the house by a certain date which will be before you hear back from FEMA. Even with the elevation certificate the flood insurance could still be thousands of dollars. Fortunately there is a way around this. It is called the 2-Year PRP Eligibility Extension Form. I will link to the documents below but you basically go to the town office and reference the old flood maps which should show your home in a different flood zone. Once you determine this, you fill out the form referencing the old flood zone and have a town official sign off on the document. Please note, banks do not require you to have flood insurance if your property is in a "flood zone C". By completing and submitting these forms, the buyers flood insurance gets grandfathered under the old flood zone for the next two years. So in the situation I just dealt with, the annual flood insurance premium went from $3,400 down to $365!
Are you in a flood zone?
The FEMA website has an absolutely terrible mapping system that is outrageously slow and not very user friendly. Below is a link to the site that I feel is the easiest to work with.
Click on the links below to access the PDF documents for the grandfathered flood map solution
If you are dealing with a flood zone issue, I would highly recommend that you contact Eckman Engineering. He was incredibly responsive and started and completed the job in just a few days. Plus he was extremely knowledgeable and explained the process in laymen terms!
Eckman Engineering, LLC
1950 Lafayette Road, Suite 301, P.O. Box 3035
Portsmouth, NH 03802
Ph. (603) 433-1354
If you would like more information about a property, market information about your town or just want to talk real estate, please don't hesitate to give me a call or shoot me an email 603-252-6428 firstname.lastname@example.org