FEMA Flood Zones and the Mandatory Purchase Requirement

Steve Murchison Flood Zone Determination 0 Comment(s)

This article is written to aid the general public in understanding the mandatory purchase requirement and FEMA’s flood zone designations. It describes the FEMA zones and the mandatory purchase requirement at a high level and provides some details for those who have interest in nuances.

The Flood Disaster Protection Act of 1973 introduced a mandatory purchase requirement of flood insurance for buildings and mobile homes in high flood risk areas. The law requires federally back lenders to document whether the building securing a mortgage is in a low-to-moderate flood risk area or in a high flood risk area known as a Special Flood Hazard Area (SFHA). For loans on buildings in a SFHA, the lender must assure flood insurance is obtained prior to closing and maintained for the life of the loan. Flood insurance premiums are typically escrowed, and the lender will force place flood insurance if the policy lapses or if a building not in a SFHA at closing subsequently becomes part of a SFHA.

Flood hazard areas are identified as low risk, moderate risk, or as a SFHA by zone designations shown on FEMA’s Flood Insurance Rate Map (FIRM). The standard measure for a SFHA is an area having a 1% or greater chance of being damaged by a flood event in any given year (also commonly referred to as the 100-year flood). SFHAs are labeled as A, AO, AH, A1-A30, AE, A99, AR, AR/AE, AR/AO, AR/A1-A30, AR/A, V, VE, and V1-V30. These are also the zones where the mandatory purchase requirement exists. Moderate flood risk zones, labeled as B or X-shaded (also referred to as X500), are between the 1% and the 0.2% annual chance (or 500-year) flood. Zones C or X are the low risk designations, areas having less than a 0.2% annual chance of flood damage. But be aware, just because a property is not in a SFHA doesn’t mean it will not flood. About a third of all flood damage occurs to structures in the low to moderate risk zones.

Distinctions between SFHA zones include:

Zone A has a 1% or greater annual chance of a flood event determined using approximate methodologies. No Base Flood Elevations (BFEs) or flood depths are shown.

Zone AO has a 1% or greater annual chance of shallow flooding where average depths are between 1 and 3 feet. Average depths derived from hydraulic analyses are shown for this zone.

Zones AH, A1-A30, AE, and AR have a 1% or greater annual chance of a flood event. The BFE is shown on the FIRM for these zones. A1-A30 are older designations which have been replaced by AE; they are now virtually interchangeable.

A99 is a SFHA where enough progress has been made on the construction of a protection system (e.g. levee or dam) to consider it complete for rating purposes. No BFE or depths are shown.   

Zone V has a 1% or greater annual chance of a flood event determined using approximate methodologies. No Base Flood Elevations (BFEs) or flood depths are shown. Zone V are found in some coastal areas and have an additional storm surge (high-velocity wave action) hazard.

Zone V1-30 and VE have a 1% or greater annual chance of a flood event with an additional storm surge (high-velocity wave action) hazard found in some coastal areas. The BFE is shown on the FIRM for these zones. V1-V30 are older designations which have been replaced by VE; they are now virtually interchangeable. 

More information about FEMA zones can be found at www.fema.gov or reach out to any of the flood experts at MassiveCert.