source:
  type: regulation
  id: usda-hb-3555-12.10
  authority: USDA Technical Handbook HB-1-3555 §12.10 — Hazard Identification
  description: "USDA HB-1-3555 §12.10 (Hazard Identification). Gap-fill (verbatim). \n"
obligations:
- id: usda-hb-3555-12.10-0
  canonical_id: usda-hb-3555-12.10-0
  section: USDA HB-1-3555 12.10 — Hazard Identification
  description: '12.10 Hazard Identification: ZARD IDENTIFICATION A. Due Diligence Lenders are required to utilize
    due diligence regarding potential environmental hazards to ensure the property is safe, sanitary, and has sufficient
    value to adequately secure the loan. The property must be free to the maximum extent possible …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.10 — Hazard Identification
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: ZARD IDENTIFICATION A. Due Diligence Lenders are required to utilize due diligence regarding
      potential environmental hazards to ensure the property is safe, sanitary, and has sufficient value to adequately
      secure the loan. The property must be free to the maximum extent possible of any known hazards that may have
      adverse effects on the health and safety of the occupants. The structural soundness of the dwelling must ensure
      customary use and enjoyment of the property by the occupants. While the Agency does not specify how the lender’s
      due diligence must be conducted, the level of review must be equivalent to the standards established by Fannie
      Mae, Freddie Mac, the Federal Housing Authority (FHA), or the United States Veterans Administration (VA).
      Appraisers play an important role in identifying potential environmental hazards by notifying the lender of
      concerns identified during their visit to the property. The appraiser is required to note readily observable
      conditions. If the lender knows or is informed by another party of a potential hazard, the information must
      be disclosed to the appraiser. Lenders must follow up on all potential environmental hazards identified by
      an appraiser to determine the nature and scope of the problem, and the impact the problem is likely to have
      on the property’s value. If potential environmental hazards are noted, the lender must carefully document
      the suspected problem and the findings of its investigation. If the lender’s investigation reveals an environmental
      hazard does exist, the lender must ensure the hazard is mitigated before requesting the loan guarantee. B.
      Flood Hazards The lender must complete, or arrange for a contractor to complete, FEMA Form FF- 206-FY-21-116,
      Standard Flood Hazard Determination Form (SFHDF), to determine whether the dwelling is in a Special Flood
      Hazard Area (SFHA) in accordance with the National Flood Insurance Reform Act of 1994. Existing dwellings
      located in a SFHA are eligible for the SFHGLP when flood insurance through FEMA’s National Flood Insurance
      Program (NFIP) is available for the
    drafter_attestation: Verbatim from HB-1-3555 §12.10 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.10-1
  canonical_id: usda-hb-3555-12.10-1
  section: USDA HB-1-3555 12.10 — Hazard Identification
  description: '12.10 Hazard Identification: 05-05-25) PN 640 Guidance documents lack the force and effect of law,
    unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any
    guidance that is not available through their guidance portal, except to establish historical facts.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.10 — Hazard Identification
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '05-05-25) PN 640 Guidance documents lack the force and effect of law, unless expressly authorized
      by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available
      through their guidance portal, except to establish historical facts. community and flood insurance, whether
      NFIP, “write your own,” or private flood insurance, is purchased by the borrower. Lenders are required to
      accept private flood insurance policies that meet the requirements of 42 U.S.C. 4012a (b)(1)(A) and remain
      responsible for ensuring private policies continue to meet this requirement. Insurance must be obtained as
      a condition of closing and maintained for the life of the loan for existing residential structures when any
      portion of the structure is determined to be in a SFHA, including decks, carports, etc. However, according
      to the Homeowner Flood Insurance Affordability Act (HFIAA) of 2014, flood insurance is not required for any
      additional structures that are located on the property but are detached from the primary residential structure
      and do not serve as a residence, such as sheds, garages, or other ancillary structures. Existing dwellings
      financed through the SFHGLP are not subject to the requirement within RD Instruction 1970, Subpart F, which
      requires a search for practicable off-site alternatives to purchasing an existing dwelling within the SFHA.
      New or proposed construction in an SFHA is ineligible for a loan guarantee unless: x A final Letter of Map
      Amendment (LOMA) or final Letter of Map Revision (LOMR) that removes the property from the SFHA is obtained
      from FEMA; x The lender obtains a FEMA National Flood Insurance Program Elevation Certificate (FEMA Form FF-206-FY-22-152).
      The flood elevation certificate must document that the lowest floor (including the basement) of the residential
      building, and all related improvements/equipment essential to the value of the property, are built at or above
      the 100-year flood elevation in compliance with National Flood Insurance Program (NFIP) criteria. The flood
      elevation certificate must be prepared by a licensed engineer or surveyor; or x Documentation is included
      in the file in accordance with RD Instruction 1970 Subpart F, that there is a demonstrated need for the SFHGLP
      and there are no practicable alternatives to new construction within the SFHA that are acceptable to the applicant(s).
      Examples include but are not limited to the following: the entire community is located within the SFHA, there
      are no comparable homes to the proposed new dwelling, the existing housing stock is unacceptable to the applicant,
      etc. Note: Part of the site may be in the SFHA without triggering these requirements if no part of the dwelling
      is in the SFHA. At the lender’s discretion they may require flood insurance even if the residential building
      and related improvements to the property are'
    drafter_attestation: Verbatim from HB-1-3555 §12.10 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.10-2
  canonical_id: usda-hb-3555-12.10-2
  section: USDA HB-1-3555 12.10 — Hazard Identification
  description: '12.10 Hazard Identification: 05-05-25) PN 640 Guidance documents lack the force and effect of law,
    unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any
    guidance that is not available through their guidance portal, except to establish historical facts.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.10 — Hazard Identification
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '05-05-25) PN 640 Guidance documents lack the force and effect of law, unless expressly authorized
      by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available
      through their guidance portal, except to establish historical facts. not located within the SFHA, but the
      lender has reason to believe that the building and related improvements to the property may be vulnerable
      to damage from flooding. Existing dwellings and newly constructed dwellings located within the SFHA which
      are not served by public sewer systems and have on-site septic or sewage treatment systems must have a drinking
      water supply which is protected from cross contamination from the onsite septic/sewage treatment during flooding.
      A property serviced by an on- site septic or sewage treatment system is eligible under this Section, provided
      one of the following can be met: x The property is served by a publicly provided water supply. x The property
      is serviced by a private drinking water well/supply with a fitted sanitary well cap which prevents backflow
      floodwater from entering the drinking supply well. x The property is served by a private drinking water well/supply
      whose opening is located above the base flood elevation of the SFHA. Additional documentation, such as an
      elevation certificate, will be required to verify this type of property. Flood insurance is not required for
      properties located in unmapped communities. Since these are often newly developed areas where the potential
      for flooding is unknown, lenders have the discretion to require flood coverage as a condition of the loan.
      SECTION 5: CONDOMINIUMS [7 CFR 3555.205]'
    drafter_attestation: Verbatim from HB-1-3555 §12.10 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
