Skip to content
ClosingCodeClosingCode
ENES

Closing · 12 CFR 22.3, 22.9Flood zone notice and required flood insurance

If the home is in a FEMA special flood hazard area, a federally regulated lender must give the borrower a written notice – the flood warning, the insurance purchase requirement, NFIP and private policy availability and whether disaster relief may be available – within a reasonable time before closing (12 CFR 22.9; FDIC 339.9). The lender may not close the loan unless the building is insured for flood for the loan term, at least for the lesser of the loan balance or the maximum NFIP coverage (22.3).

The rules

  1. Notice (§22.9(a)–(c))

    Written notice to the borrower within a reasonable time before the transaction is completed, whether or not flood insurance is available – and to the servicer. The lender keeps a record of receipt.

  2. Contents (§22.9(b))

    A FEMA-approved warning that the building is in a special flood hazard area; the purchase requirement; that NFIP and private policies are available; a suggestion to compare coverage and premiums; and whether federal disaster relief may be available.

  3. Insurance (§22.3(a))

    For the term of the loan, at least the lesser of the outstanding principal or the maximum NFIP coverage for that property type. It covers the building and personal property securing the loan, not the land.

  4. Private flood (§22.3(c))

    The lender must accept a private flood policy that meets the definition of private flood insurance and the coverage requirement.

What the TC watches

  • The flood zone determination early in the loan – it can add a policy and a premium to cash to close.
  • The signed flood notice in the loan package before closing.
  • The insurance binder's effective date matching closing.
  • State flood disclosures from the seller (for example Texas, Florida, New York) – they are separate.

Questions about flood notices and flood insurance

When must the lender give the flood zone notice?

Within a reasonable time before the transaction is completed (12 CFR 22.9(c); FDIC 12 CFR 339.9(c)).

How much flood insurance is required on a mortgage?

At least the lesser of the outstanding loan balance or the maximum NFIP coverage for the property type, for the term of the loan (12 CFR 22.3(a)).

Must a lender accept private flood insurance?

Yes, if the policy meets the regulatory definition of private flood insurance and the coverage requirement (12 CFR 22.3(c)).

Does flood insurance cover the land?

No. Coverage under the Act is limited to the building or mobile home and personal property securing the loan, not the land.

Is the lender's flood notice the same as the seller's flood disclosure?

No. The lender's notice is federal; many states also require a seller flood disclosure.

Related guides

Add the flood determination, the signed notice and the insurance binder as dated tasks on the deal in ClosingCode before closing.

Start free trial

Sources: 12 CFR 22.3 and 22.9 (OCC) and 12 CFR 339.9 (FDIC) (eCFR, read October 24, 2026).

General information, not legal or insurance advice. ClosingCode is software; it is not a lender, insurer or law firm.