Date: December 28, 2010
To: All Approved Mortgagees
All Approved Mortgage Servicers
All FHA Roster Appraisers
Mortgagee Letter 2010-43
Subject Flood Zone Requirements for Federal Housing Administration (FHA)
Purpose This Mortgagee Letter provides new guidance on FHA Flood Zone
requirements and updates Mortgagee Letter 2009-37. FHA now requires that
all Mortgagees obtain a flood zone determination on all properties instead of
strongly encouraging such action. In addition, FHA is now consistent with
the Coastal Barrier Resources Act (CBRA) by prohibiting FHA Mortgage
Insurance for properties located within designated coastal barriers.
The new guidance contained in this Mortgagee Letter is as follows:
A requirement that Mortgagees obtain life-of-loan flood zone
determination services for all properties that will be collateral for
A notice that any property located within a designated Coastal
Barrier Resource System (CBRS) unit is not eligible for an FHAinsured
Effective Date All requirements contained in this Mortgagee Letter are effective for all case numbers assigned on or after March 1, 2011.
Changes to Existing Policy:
The changes to existing policy that are a part of this mortgagee letter provide
new guidance and clarification of existing guidance. The revisions identify
the Topic heading and provide the entire content of each block affected with
the specific changes underlined. The changes will be integrated into the FHA
Single Family On-Line Handbooks prior to March 1, 2011.
If you have questions concerning this Mortgagee Letter, please call the FHA
Resource Center at 1-800-CALLFHA (1-800-225-5342). Persons with
hearing or speech impairments may reach this number via TDD/TTY by
calling 1-877-TDD-2HUD (1-877-833-2483).
David H. Stevens
Assistant Secretary for Housing-Federal Housing Commissioner
Mortgagee Letter 2010-43, 4155.2, Chapter 4.3.j
Instructions to FLHA Roster Appraisers:
FHA Roster Appraisers are required to review the applicable FEMA
FIRM and make appropriate notations on the applicable appraisal
reporting form. If the property is located within a SFHA, the
Attach a copy of the flood map panel to the appraisal report.
Enter the FEMA zone designation on the reporting forms well
as identify the map panel number and map date.
Quantify the effect on value, if any.
Note: If the property is not shown on any map, the appraiser must
enter “not mapped.”
Appraisers are required to perform the due diligence necessary to
determine if a property is located within a CBRS. The CBRS
boundaries are identified on the FEMA FIRM by patterns of
backward slanting diagonal lines, both solid and broken. The
USFWS mapping database is an additional source that identified the
CBRS boundaries. If the property is located within the CBRS
boundaries, appraisers are instructed to immediately stop work on
the assignment and return the file to the Mortgagee.
Reference: For more information on flood insurance requirements,
see UD 4150.2, Valuation Analysis for Single Family One-to-Four