Flood Insurance fro Natomas
One of the many forms that a borrower signs when buying and financing a home is a simple one-page document from the lender about flood insurance.
Every home in the country is located in some type of federal flood zone. The flood zones range from frequent to unlikely. Most homes in Sacramento are located within a 100- year flood zone (the chance of it flooding in any given year is one in a hundred) and most homes in El Dorado County are located in 500-year flood zones, pretty unlikely if you live above Folsom you are going to have a problem.
The form that you sign with your loan documents, basically says that if the federal government determines that your home lies within a major flood hazard area, the lender could require the borrower to obtain flood insurance. This is a reasonable request since the lender usually has more equity in a property than does the borrower at the time of the loan. Lenders don’t want to have loans on homes that are under water so like the requirement of fire insurance, lenders demand that homes financed with a loan and located in an area prone to flooding have flood insurance.
Occasionally flood prone areas change. Improvements to levees, or the building of a dam may remove a home previously classified in a flood area to an area unlikely to flood. Sometimes the risks of flooding are re-evaluated and a home that wasn’t previously within a more active flood zone is now determined to have more risks of flooding. This is what is happening in Natomas.
Twenty-four thousand people live in the Natomas Bowl. There is a reason we in the industry call it a “bowl” or “basin”. Natomas is prone to flooding. It always has been. Years ago, city officials and developers with the help of the Corps of Engineers re-classified the area from an active flood prone area to an “unlikely” flood area. This allowed builders to build without the requirement for home owners to obtain flood insurance. Now, the Federal Emergency Management Agency (FEMA) wants to re-classify the area back to an active flood area which will require all homeowners to carry flood insurance. Flood Insurance, depending upon the particular zone can range from $300 a year to $1,000 a year on a typical $500,000 home.
The development of Natomas Basin is an example of greed and politics over-ridding common sense. Now area home owners will be forced to pay the price.
Every home in the country is located in some type of federal flood zone. The flood zones range from frequent to unlikely. Most homes in Sacramento are located within a 100- year flood zone (the chance of it flooding in any given year is one in a hundred) and most homes in El Dorado County are located in 500-year flood zones, pretty unlikely if you live above Folsom you are going to have a problem.
The form that you sign with your loan documents, basically says that if the federal government determines that your home lies within a major flood hazard area, the lender could require the borrower to obtain flood insurance. This is a reasonable request since the lender usually has more equity in a property than does the borrower at the time of the loan. Lenders don’t want to have loans on homes that are under water so like the requirement of fire insurance, lenders demand that homes financed with a loan and located in an area prone to flooding have flood insurance.
Occasionally flood prone areas change. Improvements to levees, or the building of a dam may remove a home previously classified in a flood area to an area unlikely to flood. Sometimes the risks of flooding are re-evaluated and a home that wasn’t previously within a more active flood zone is now determined to have more risks of flooding. This is what is happening in Natomas.
Twenty-four thousand people live in the Natomas Bowl. There is a reason we in the industry call it a “bowl” or “basin”. Natomas is prone to flooding. It always has been. Years ago, city officials and developers with the help of the Corps of Engineers re-classified the area from an active flood prone area to an “unlikely” flood area. This allowed builders to build without the requirement for home owners to obtain flood insurance. Now, the Federal Emergency Management Agency (FEMA) wants to re-classify the area back to an active flood area which will require all homeowners to carry flood insurance. Flood Insurance, depending upon the particular zone can range from $300 a year to $1,000 a year on a typical $500,000 home.
The development of Natomas Basin is an example of greed and politics over-ridding common sense. Now area home owners will be forced to pay the price.
posted by Ken Calhoon at 5:52 AM
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