Resale value of a house designated to be in a special flood hazard area

[Julia Rohleder]

We have found a great house, in a great neighborhood, that typically has great resale values. The house is priced lower, because it needs updating. The house is designated to be in a special flood hazard area. The description says that there's a 26% chance of a flood event over the course of a 30 year mortgage. The first flood insurance estimate is $3200/year, which would be a deal breaker. I've heard that USAA is typically very expensive insurance, so we're going to get a couple of other quotes.

Our biggest quandary is that this seemed to be a GREAT investment, because these types of homes in this area don't come up very often, in this price range. The fact that it was in a flood hazard area wasn't disclosed by either realtor, even though we specifically asked if it was in a flood plain. We've paid for the inspection, and the house is in great shape, and shows no water damage. The creek near this property flooded in Sept 2013, but this house nor the houses across the street (closer to the creek) were flooded.

We are angry with the realtor, and kind of want to say no deal. We've fallen in love with this house. I wonder if I would feel differently about the investment aspect of this property had the flood insurance requirement been disclosed up front.

What kind of impact does the flood insurance requirement have on the resale value and the ability to rent this house?