source:
  type: guide
  id: fnma-sel-b7-3-06
  authority: Fannie Mae Selling Guide B7-3-06 — Flood Insurance Requirements for All
    Property Types
  description: Fannie Mae Selling Guide B7-3-06 — Flood Insurance Requirements for
    All Property Types.
  coverage_tier: operative
obligations:
- id: fnma-sel-b7-3-06-full
  canonical_id: fnma-sel-b7-3-06-full
  section: Fannie Mae Selling Guide B7-3-06 — Flood Insurance Requirements for All
    Property Types
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B7-3-06 — Flood Insurance Requirements for
      All Property Types
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B7-3-06, Flood Insurance Requirements for All Property Types
      (02/07/2024) Introduction This topic contains information on Fannie Mae’s ﬂood
      insurance requirements, including: Determining if a Property Requires Flood
      Insurance Determining if Flood Insurance is Required on Speciﬁc Structures Community
      Eligibility Acceptable Flood Insurance Policies Requirements for One- to Four-Unit
      Properties Requirements for Project Developments Deductible Requirements Delivery
      Requirements Requirements During a National Flood Insurance Program Lapse Determining
      if a Property Requires Flood Insurance The lender and servicer must ensure that
      the subject property is adequately protected by ﬂood insurance when required.
      Flood insurance coverage is required when a loan is secured by a property located
      in a Special Flood Hazard Area (SFHA), or a Coastal Barrier Resources System
      (CBRS) or Otherwise Protected Area (OPA). The lender and servicer must determine
      whether the property is located in an SFHA, a CBRS, or an OPA by using the FEMA
      Standard Flood Hazard Determination form. All ﬂood zones beginning with the
      letter "A" or "V" are considered SFHAs. Note: If the subject property is located
      within a CBRS or an OPA, ﬂood insurance is required regardless of whether the
      property is located in an SFHA. Flood insurance is not required on a principal
      or residential detached structure securing the loan if the lender or servicer
      obtains a letter from FEMA stating that its maps have been amended and the structure
      is no longer in an SFHA. Determining if Flood Insurance is Required on Speciﬁc
      Structures The following table describes how to evaluate a property to determine
      if ﬂood insurance is required. For these requirements, the "principal structure"
      is the primary residential structure on the subject property. Published May
      6, 2026 873 If... Then ﬂood insurance is... any part of the principal structure
      is located within an SFHA required. the principal structure is not located within
      an SFHA, but a residential detached structure aﬃxed to the land that serves
      as part of the security for the loan is located within the SFHA required for
      the residential detached structure. the principal structure is not located within
      an SFHA, but a non-residential detached structure aﬃxed to the land that serves
      as part of the security for the loan is located within the SFHA not required
      on either structure. the principal structure is not located within an SFHA,
      but a detached structure aﬃxed to the land that does not serve as part of the
      security for the loan is located within the SFHA not required on either structure.
      Community Eligibility If the lender or servicer determines that a principal
      or residential detached structure is located in an SFHA, but the community does
      not participate in the National Flood Insurance Program (NFIP), the loan is
      not eligible for purchase by Fannie Mae. If the property is in a non-participating
      community and a CBRS or an OPA, it is only eligible for purchase by Fannie Mae
      if it is not located in an SFHA. Loans secured by properties in the Emergency
      Program of the NFIP are eligible for purchase by Fannie Mae with coverage equivalent
      to the NFIP maximum that is available. Acceptable Flood Insurance Policies The
      ﬂood insurance policy must be one of the following: a standard policy issued
      under the NFIP; or a policy issued by a private insurer, provided the terms
      and amount of coverage are at least equal to that provided under an NFIP policy
      based on a review of the full policy issued by a private insurer, and Published
      May 6, 2026 874 the insurer meets Fannie Mae''s rating requirements as speciﬁed
      in Property Insurer Rating Requirements in B7-3-01, General Property Insurance
      Requirements for All Property Types. A Policy Declaration page is acceptable
      evidence of ﬂood insurance. Requirements for One- to Four-Unit Properties The
      minimum amount of ﬂood insurance required for ﬁrst mortgages must be equal to
      the lesser of 100% of the replacement cost value of the improvements, the maximum
      coverage amount available from NFIP, or the unpaid principal balance (UPB) of
      the loan (or loan amount at the time of origination). See Insurance Requirements
      for Renovation and Energy Improvement Loans in B7-3-05, Additional Insurance
      Requirements for additional information. See Mortgagee Clause for Property and
      Flood Insurance and Named Insured for Property and Flood Insurance in B7-3-08,
      Mortgagee Clause, Named Insured, and Notice of Cancellation Requirements for
      mortgagee clause and named insured requirements. Requirements for Project Developments
      When a loan is secured by a unit in an attached condo or co-op project and ﬂood
      insurance is required as described in Determining if a Property Requires Flood
      Insurance, the lender and servicer must verify that the HOA or co-op corporation
      maintains a master ﬂood insurance policy with premiums paid as a common expense,
      unless otherwise indicated in the table below. The following table provides
      additional requirements based on the project type. Published May 6, 2026 875
      Project Type Coverage Requirements Condo The lender and servicer must verify
      that the HOA maintains a Residential Condominium Building Associated Policy
      (RCBAP) or equivalent private ﬂood insurance coverage for a condo building consisting
      of attached units located within an SFHA. The only building that must be veriﬁed
      is the subject unit''s building. Fannie Mae does not require evidence of a master
      ﬂood insurance policy, provided the unit owner maintains an individual ﬂood
      dwelling policy that meets the coverage requirements of this Guide for the following
      loans or project types: • high LTV reﬁnance loans, • units in a two- to four-unit
      project, and • detached condo properties. The master ﬂood insurance policy maintained
      by the HOA must cover the subject unit''s • entire building; and • all of the
      common elements and property, including machinery and equipment that are part
      of the building. The coverage amount for the building must be at least equal
      to the lesser of • 80% of the replacement cost value (1), or • the maximum coverage
      amount available from NFIP per unit (2). (1)If the master ﬂood insurance policy
      meets the minimum coverage requirement of 80% of the replacement cost value,
      but the per unit coverage amount does not meet the requirement for loans secured
      by one- to four-unit properties, as described in Requirements for One- to Four-Unit
      Properties, the unit owner must maintain a supplemental policy for the diﬀerence.
      (2)If the commercial space of an attached condo is over 25%, coverage provided
      by the General Property Form (or equivalent coverage) is insuﬃcient. A private
      ﬂood insurance policy, or a private ﬂood insurance policy in conjunction with
      a General Property Form policy (or equivalent coverage) must be maintained by
      the HOA to equate to coverage requirements for projects eligible for an RCBAP.
      The contents coverage must equal the lesser of • 100% of the replacement cost
      value of all contents owned in common by the association members, or • the maximum
      coverage amount available from NFIP. Published May 6, 2026 876 Project Type
      Coverage Requirements Co-op The lender and servicer must verify that the co-op
      corporation maintains a General Property Form policy or equivalent private ﬂood
      insurance coverage for a co-op building that is located within an SFHA. The
      master ﬂood insurance policy maintained by the co-op corporation must cover
      the subject unit''s • entire building, and • all of the common elements and
      property, including machinery and equipment that are part of the building. The
      coverage amount for the building must be at least equal to the lesser of • 100%
      of the replacement cost value, or • the maximum coverage available from NFIP.
      PUD The lender and servicer must verify that each attached or detached individual
      PUD unit maintains a Dwelling Form policy or equivalent private ﬂood insurance
      policy on the subject property. See Requirements for One- to Four-Unit Properties
      above for the required amount of coverage. See Mortgagee Clause for Property
      and Flood Insurance and Named Insured for Property and Flood Insurance in B7-3-08,
      Mortgagee Clause, Named Insured, and Notice of Cancellation Requirements for
      additional information. Deductible Requirements The following table describes
      the maximum deductible allowed by Fannie Mae for an NFIP or a private ﬂood insurance
      policy. Property Type Deductible Requirement One- to four-unit properties The
      deductible must not exceed the maximum deductible amount currently oﬀered by
      NFIP for one- to four-unit properties insured under an NFIP Dwelling Form. Condo
      projects The deductible must not exceed the maximum deductible amount currently
      oﬀered by NFIP for condo projects insured by an RCBAP. This deductible requirement
      applies to all condo projects, regardless of the percentage of commercial space.
      Published May 6, 2026 877 Property Type Deductible Requirement Co-op projects
      The deductible must not exceed the maximum deductible amount currently oﬀered
      by NFIP for co-op projects insured under an NFIP General Property Form. PUDs
      The deductible on individual attached or detached PUD units must not exceed
      the maximum deductible amount currently oﬀered by NFIP for one- to four- unit
      properties insured under an NFIP Dwelling Form. Delivery Requirements The following
      table describes the special feature code requirements applicable to ﬂood insurance.
      See C1-2-02, Loan Data and Documentation Delivery Requirements for detailed
      loan delivery requirements. Structure Location and Status of Flood Insurance
      Coverage Special Feature Code • Some part of a principal and/or residential
      detached structure is located within an SFHA, and • Flood insurance coverage
      is in place on the principal and/or residential detached structure. SFC 170
      Flood Insurance — Special Flood Hazard Area • No part of a principal or residential
      detached structure is located within an SFHA, but • Flood insurance coverage
      is in place on the principal and/or residential detached structure. SFC 175
      Flood Insurance — Not a Special Flood Hazard Area • No part of a principal or
      residential detached structure is located within an SFHA, and • No ﬂood insurance
      coverage is in place on the principal or residential detached structure. Note:
      In addition to these criteria, this special feature code also applies if there
      is a non-residential detached structure aﬃxed to the land for which any part
      is in an SFHA. SFC 180 No Flood Insurance — Not a Special Flood Hazard Area
      Requirements During a National Flood Insurance Program Lapse The NFIP may lapse
      due to a shutdown of the federal government or if Congress does not renew the
      NFIP''s Published May 6, 2026 878 authorization to issue new policies, increase
      coverage on existing policies, or issue renewal policies. For the duration of
      such a lapse, a lender may sell a loan to Fannie Mae where ﬂood insurance is
      otherwise required without an active ﬂood insurance policy provided the requirements
      below are met. During the lapse, lenders must have a process in place to identify
      properties securing loans sold to us without proper evidence of active ﬂood
      insurance on the conditions that the borrower must provide acceptable evidence
      of: a completed application for NFIP ﬂood insurance and proof of the premium
      payment or the ﬁnal settlement statement reﬂecting payment of the initial premium,
      or the assignment of an existing NFIP ﬂood insurance policy from the property
      seller to the purchaser. The following table provides additional requirements
      that lenders and servicers must follow during the lapse. ✓ Lenders and servicers
      must... Continue to make ﬂood determinations, provide timely, complete and accurate
      notices to borrowers in accordance with applicable laws, and comply with all
      other ﬂood insurance requirements. Take all steps (as permitted by applicable
      law) necessary to facilitate the issuance of coverage once the lapse has ended.
      Retain documentation to support acceptable evidence of ﬂood insurance. Reﬁnance
      loans secured by properties where ﬂood insurance is required typically already
      have acceptable ﬂood insurance coverage in place at the time of closing. Speciﬁc
      requirements for reﬁnance loans are listed below. If a reﬁnance loan... Then
      the lender... has acceptable ﬂood insurance coverage in place at the time of
      closing that does not expire prior to sale to Fannie Mae must be accurately
      reﬂected as the mortgagee named on the policy. has a ﬂood insurance policy that
      expires during the lapse and before sale to Fannie Mae must follow all requirements
      in this topic adapted appropriately to a renewal. requires more coverage as
      a result of the reﬁnance may sell a loan on the condition that the borrower
      provide acceptable evidence of an endorsement request and proof of the additional
      premium payment. Published May 6, 2026 879 When delivering loans aﬀected by
      a lapse of the NFIP, lenders must follow the Delivery Requirements described
      above and provide all applicable loan delivery data elements as if a required
      ﬂood insurance policy was in place. The lender and servicer remain obligated
      for all selling representations and warranties and servicing obligations concerning
      the existence of a standard policy issued under the NFIP or an equivalent private
      ﬂood insurance policy. Note: Fannie Mae accepts ﬂood insurance policies from
      private insurers as listed in Acceptable Flood Insurance Policies, but such
      private ﬂood insurance policy coverage is not a required alternative in the
      event of a lapse of NFIP coverage. Recent Related Announcements The table below
      provides references to recently issued Announcements that are related to this
      topic. Announcements Issue Date Announcement SEL-2024-01 February 07, 2024 Announcement
      SEL-2022-10 December 14, 2022 Announcement SEL-2021-11 December 15, 2021 Announcement
      SEL-2019-07 August 07, 2019 Published May 6, 2026 880'
  judgment: false
