All Forum Posts by: Bryan Wallace

Flood insurance premiums are rising at an accelerated rate due to Congress deciding to no longer subsidize rates. The National Flood Insurance Program (NFIP) is in terrible shape financially due to events like Hurricane Katrina / Sandy etc. If you have a federally backed mortgage, expect rates to rise 15-20% per year until they reach the actuarial rate.

Sorry that I am late on this thread - just saw it. FEMA will take some time to get the FIRMs recreated and will probably add some areas into the 100 year floodplain, which is where flood insurance is required if a federally backed mortgage is in use. As described, flood insurance costs are rising dramatically due to the consistent losses in the National Flood Insurance Program (NFIP).

If a structure is in the 100 year floodplain and receives greater than 50% damage, this is known as 'substantial damage'.  This means that the total cost of repairs is 50 % or more of the structure's market value before the disaster occurred.  A 'substantial damage' determination is made at the local level by a floodplain administrator or building department official.  If the local government office decides that there has been substantial damage to the structure, then the structure must be brought into compliance through elevating or other changes to protect against future flood losses.  If it is a non-residential structure, then it can be flood-proofed.

Check at the local level for permit requirements before construction.  If a substantial damage determination is made after you have completed the construction / repairs, they can still make you elevate etc. depending on what the local floodplain ordinance says.  

It also depends on where the water will go if you do work in your yard. Pushing water onto a neighoring property can cause some tension if the water has no where to go - the neighbor will blame you. It can also depend on how long the backyard stays wet. If it rains and the yard is usable fairly soon, I would not worry about it. If the yard turns into a swamp, you may want to figure out a solution. Call your community drainage, highway, or engineering department for advice.

Also consider checking with the local Floodplain Administrator, Building Commissioner's office, or Engineering/Drainage Department. They should be able to tell you if there is a localized drainage issue and why the site is in the floodplain. I do the same type of work as Trent Ford - he is correct. Make sure you take a hard look at this.

Huiping Sheng An AE Zone has been more 'studied' by FEMA, so in theory, the map depicting the flood zone is more accurate. However, it is just computer models backed by survey data. Anthony Lee is correct - it is a matter of risk tolerance. Contact the local Floodplain Administrator or Building Commissioner's office to find out if the area regularly floods.

There is not necessarily a formula for the valuation of House A vs. House B - you need to know the valuation adjustment for the floodplain, assuming the structures are identical. Lets say that House A is in the floodplain and House B sold for $200,000. You will need to find a comp (House C) that has recently sold in the floodplain and determine the adjustment used for the floodplain (which may mean comparing House C to House D). You would then apply this adjustment to House B. If the adjustment is $10,000, then House A (assuming all things are identical), could come in at $190,000. The hard part is determing the adjustment. That is what an appraiser would do. Every market area will be different.

Flood insurance through the National Flood Insurance program is no longer being subsidized by the federal government. Rates are rising 20ish% each year until a structure's policy reaches the acturial rate for a federally backed mortgage. Do some research on the future potential costs before purchasing a structure that will require flood insurance.

Flood insurance through the National Flood Insurance program is no longer being subsidized by the federal government. Rates are rising 20ish% each year until a structure's policy reaches the acturial rate. Do some research before purchasing a structure that will require flood insurance.

Flood insurance rates are going up significantly due to the federal subsidies being phased out over the next 5-10 years. If the property is in the floodplain, you will want to get an idea of what the rates will be in a few years.

Wetlands are heavily protected in the U.S. and require permits if there will be any impact to one. Do you plan on filling in the wetland to build? If so, entities such as your State environmental agency and the U.S. Army Corp of Engineers will have jurisdiction over the wetland and will want to know your plans.