All Forum Posts by: Bryan Wallace

The National Flood Insurance Program (NFIP) is badly in debt, so Congress has decided to stop subsidizing flood insurance. Rates will go up each year by approx 18% per year until a structure's policy reaches the acturial rate. Talk to your local Building Commissioner's Office, determine the BFE and build above it (don't forget the utilities need to be above the BFE also). A good insurance agent should be a help you estimate the costs of future insurance

Due to the National Flood Insurance Program being massively in debt due to Hurricane Katrina, Sandy etc, Congress has started phasing out the subsidies for flood insurance - this just started last year. You can expect the flood insurance to go up over the next several years for most properties.

The trick with the 100 year floodplain is that it is typically based on physical surveys and computer modeling - a major flood can happen at anytime. The 100 year floodplain is a 1% chance that a flood of that size will happen in a year. Theoretically, a 100 year flood can happen today and another happen tomorrow. This comes down to risk tolerance and being able to afford the insurance. Talk to your local community Building Commissioners office or Engineering Dept office and find out how often flooding occurs in that area.

When doing a valuation, comps are not as useful for something of this size. An appraiser will primarily use the income approach, not comps, to provide an opinion of value.

As mentioned, detention basins are a stormwater facility designed to hold back water during a rain event. It allows water to be slowly released back into the local waterway / drainage system. Usually, a HOA or local community will maintain the basin. If the basin is overgrown, I would be concerned since it will not hold the proper amount of volume. Otherwise, find out who takes care of it to see if you will get a charge on your taxes for the basin.

An elevation certificate (EC) is used to determine the lowest living level (floor) of a structure for the underwriter. It is compared against the 100-year flood elevation, also known as the base flood elevation (BFE). The lower your structure's elevation is below the BFE, the more your flood insurance premium will be. Call your local Building Commissioner's office. They are the most likey place to have an EC. Most communities have not required an EC if the structure is in the floodplain (this is slowly changing), so do not be shocked if one does not exist. If you must obtain an EC, a licensed surveyor must complete it for you.

So there are a couple types of flooding - that due to localized flooding in a specific area i.e. the streets drainage pipes are plugged or too small. Then there is the flooding that happens adjacent to waterways. This is what FEMA flood maps are basically for. Local goverment will not pay for drainage issues on private property. However, if there is an issue with the road drains etc then they should come help. If there is a ditch or creek behind the structure that floods badly, then there is probably not much they can do. I would check to see if there are any planned drainage or flood projects planned in your area that may help. Otherwise, your primary choices include buying flood insurance, try to flood proof the structure, sell it, or just let it flood and fix it each time.

Flood insurance is subsidized by the federal government. A couple of years ago after hurricanes such as Katrina, Sandy etc. the gov decided to end the subsidies b/c the program is in bad shape. Flood insurance premiums are going up at a rate of 18-25% per year until a structure reaches the non-subsidized, acturial rate. The only choices you have are to pay off the mortgage so the insurance is not mandatory, try to find private flood insurance that is less expensive, attempt to flood proof the property or sell it. You may want to call your local government floodplain administrator, engineering or survey or drainage dept to see if there are any flood related improvements planned in your area, such as a drainage project, that may lower your flood risk.

Is it in a flood zone?

If you are unsure of purchasing a structure that is adjacent to the 100 year floodplain, you should consider speaking with the local community floodplain manager or someone that would be familiar with your area. Other local offices may include the City or County engineering office, Surveyor, and Drainage Department. There are many factors that go into creating the FEMA '100 year floodplain'. If the structure is in the 500 year floodplain and you are obtaining a federally backed mortgage, then it will be a lender's discretion if they require flood insurance. However, it would be a lower cost flood insurance known as 'preferred risk' as compared to the 'full risk' for the 100 year floodplain.