**NATIONAL FLOOD INSURANCE PROGRAM**

**NFIP 30-DAY WAITING PERIOD**

-   The National Flood Insurance Reform Act of 1994 set a standard
    30-day waiting period for new flood insurance applications.

-   A new flood insurance policy will go into effect at 12:01 a.m. on
    the 30^th^ calendar day [after the premium is paid]{.underline}.

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-   If a lender is [making, increasing, renewing or extending a
    loan]{.underline}, the 30-day waiting period will be waived ONLY if
    the structure is in a Special Flood Hazard Area OR if the lender is
    requiring flood insurance as a condition of obtaining a new loan.

-   If a lender determines through a [portfolio review]{.underline} that
    the structure is located in a Special Flood Hazard Area and does NOT
    have flood insurance, coverage is effective as of the date and time
    of the premium payment.

-   A waiver must be tied to a NEW LOAN or DISCOVERY that the property
    is in a Special Flood Hazard Area.

    **NFIP\--BUYOUTS**

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-   Purchasing properties in floodplains following a disaster is part of
    FEMA's repetitive loss strategy born of the 1993 Great Midwest
    Floods.

-   Following a disaster, funds equal to 20 percent of the total
    expenditures for that disaster's recovery are set aside for
    mitigation projects. Often it takes 18 months to two years before
    the amount of money available for mitigation projects is known.

-   "Buyout" projects are just one part of a comprehensive flood
    mitigation plan. Other steps that reduce damages from future
    flooding include:

    -   Elevating the home above the floodplain.

    -   Removing the home from the floodplain.

    -   Rebuilding with materials less likely to be damaged by floods.

    -   Elevating utilities above the floodplain.

-   Individual participation in a "buyout" is voluntary. Property owners
    in the area to be purchased must agree that they want to take
    advantage of this life- and property-saving opportunity. They than
    notify their local community of their interest in the program.

-   Communities willing to take the steps necessary to prevent future
    loss/repair/loss cycles can submit proposals to the state emergency
    management agency.

-   When property is purchased through the FEMA "buyout" process, it
    must be cleared of artificial impervious cover, restored to a
    natural condition, and be maintained in that condition forever.
    Removing structures from flood-prone areas reduces the amount and
    velocity of runoff, reducing losses for that property as well as
    surrounding property.

-   The state reviews the proposals and recommends to FEMA which ones
    should be funded.

-   The selection process considers which proposals will increase
    disaster resistance for the largest amount of property for the least
    amount of money.

-   Individuals who hope to have their damaged or destroyed homes
    included in a "buyout" program and who are eager to get on with
    their lives may apply for a low-interest disaster-recovery loan from
    the U.S. Small Business Administration to pay for their new homes
    outside the flooded area. If their homes are in an area included in
    a "buyout" proposal accepted by FEMA, they may use the FEMA funds to
    repay their SBA loans.

-   Individuals who receive flood insurance repair money should save
    receipts for repair work. Otherwise, the insurance money will be
    deducted from the home's purchase price.

-   Individuals who remove permanent fixtures from the structure prior
    to demolition should check with local officials first. The fair
    market value of those items may be deducted from the buyout payment.

    **NFIP\--FLOOD INSURANCE RATE MAPS (FIRMS)**

-   Flood hazard maps are critical tools for communities and individuals
    to locate potential flood zones, thereby reducing the loss and
    suffering associated with floods.

-   Flood zones can include the outlines of:

    -   **Floodway**: the area where the water runs the deepest and the
        swiftest.

    -   **100-year floodplain**: the area that has a 1 percent or
        greater risk in any given year of experiencing a flood.

    -   **500-year floodplain**: the area that has .5 percent or greater
        risk in any given year of experiencing a flood.

-   To remain useful, flood hazard map may need to be updated:

    -   As a community grows, developments alter water flows, the amount
        of impervious ground cover and the number of people who may be
        in harms way.

    -   Projects such as locks and dams and channeling of rivers and
        streams may improve water flows.

-   There are two ways a community can initiate an update to its flood
    hazard maps.

    -   The community can request that FEMA update the map. This can be
        done based on the need and available funding.

    -   The community can speed the **remapping** process by providing
        the data, compiled by a certified engineer or professional
        surveyor to FEMA through a letter of map revision for a small
        area or a map of revision for a subdivision or large tract.

-   FEMA will review the data and respond within 90 days to a **Letter
    of Map Revision**\--**LOMR**. This process, for which the community
    pays a fee, takes extra time because it is more complicated data,
    including such information as hydrology calculations.

    -   When a flood-protection project or new development that changes
        the physical boundaries of the floodplain has been completed in
        a community, the community has 180 days to submit the changes to
        FEMA for map revisions.

-   A **Letter of Map Amendment---LOMA**\--may be issued when survey or
    engineering data shows a structure no longer is in a floodplain. A
    LOMA typically takes 30 days and the forms and/or assistance can be
    obtained at 877- FEMA-MAP.

The **Technical Mapping Advisory Council** was created by FEMA as a
result of the National Flood Insurance Reform Act of 1994. The Council
sets the procedures and standards for creating flood hazard maps. More
information on the mapping process is available by calling 888-CALL
FLOOD, ext. 445, or by visiting FEMA's homepage at www.FEMA.gov and
clicking on National Flood Insurance.

**NFIP---INCREASED COST OF COMPLIANCE (ICC)**

-   Individuals with National Flood Insurance coverage and who live in
    the 100-year floodplain, have extra help recovering from a flood.
    They can receive an additional amount of money from NFIP to help
    comply with local floodplain management ordinances.

-   They can receive up to \$20,000 for

    -   Elevating the structure **above** the floodplain;

    -   Using materials less likely to be damaged by water;

    -   Moving the structure **out** of the floodplain;

    -   Building floodwalls, berms or levees to keep floodwaters from
        reaching the house;

    -   Sealing a building to keep floodwaters out, making all areas
        below the flood protection level watertight with plastic;

    -   Elevating electric panels 12 inches above the base flood
        elevation;

    -   Anchoring a fuel tank to keep it from tipping over or floating
        away;

    -   Elevating washer and dryer on platform or raising above the
        floodplain;

    -   Relocating utilities out of flood danger to a higher floor or
        the attic.

Individuals with flood insurance may receive up to \$15,000 to offset
the costs associated with bringing the home into compliance with local
floodplain management ordinances.

**NFIP---NONPARTICIPATING COMMUNITIES**

-   Individuals who live in communities that participate in the National
    Flood Insurance Program have important benefits available to them
    that are NOT available in nonparticipating communities. These
    benefits are most significant when flood disasters occur.

    -   The most important benefit is the right to purchase flood
        insurance. While most disaster-recovery funds come from
        low-interest federal loans that must be repaid, NFIP buyers will
        receive money for disaster recovery. This may include money to
        repair, rebuild or relocate their home, and, if they insured
        their home's contents, they will receive money for those losses
        as well. Renters may purchase contents insurance.

    -   Another benefit is eligibility for federal grants for temporary
        housing, minor home repairs and other serious disaster-related
        needs, as well as eligibility to apply for low-interest loans.

-   Individuals who live in a participating community may have the best
    benefit one could wish for---no flood damage at all! Because of the
    activities to inform, prepare, map and mitigate, risks of flooding
    can be significantly reduced.

-   Individuals who live in a nonparticipating community but are not in
    a flood hazard area may be eligible for federal grants and
    low-interest loans. **All disaster victims**, regardless of their
    community's NFIP status or where they live in the community, should
    register for disaster recovery assistance. Register by calling
    1-800-621-FEMA (1-800-621-3362), or 1-800-462-7585for individuals
    with speech or hearing impairment.

-   Communities make their own decisions whether to participate in NFIP.
    Participation begins with passing floodplain management ordinances
    and enforcing them.

-   Nonparticipating communities can join NFIP now. In fact, officials
    from (state agency) are meeting with local officials in these
    nonparticipating communities to explain the benefits of joining and
    the enrollment process.

    **NFIP\--REPETITIVE LOSSES**

-   The National Flood Insurance Program goal is reduction of loss of
    life and property in flood-prone areas. It is not unusual for
    certain areas to experience repetitive flooding.

-   Sometimes the cost to repair damage to a structure totals less than
    50 percent of the structure's predisaster value. In this instance,
    the structure could be rebuilt without using techniques designed to
    minimize future losses. This leaves the structure in the vicious
    cycle of flood-repair-flood-repair.

-   If the structure did reach that 50 percent threshold, known as
    "substantial damage," any repairs would have to be done in
    accordance with local floodplain management ordinances.

-   The REPETITIVE LOSS requirement tallies the damages following one or
    more flood events until such time that the total meets or exceeds 50
    percent. This brings the structure under the guidelines established
    to protect future losses of lives and property, plus reduce the
    costs associated with response and rescue efforts.

-   The strategy to reduce repetitive losses grew from the 1993 Great
    Midwest Floods. The 50 percent, or substantial damage, rule is a
    tough, long-term solution to a national problem that follows
    disasters.

    **NFIP\--SUBSTANTIAL DAMAGE**

-   The National Flood Insurance Program goal is reduction of loss of
    life and property in flood-prone areas.

-   When a structure receives 50 percent or more damage from a single
    event or multiple events, it must be rebuilt in accordance with
    local floodplain management ordinances.

-   The 50 percent, or substantial damage, rule is a tough, long-term
    solution to a national problem that follows disasters.

-   The damage may be caused by flood, fire, earthquake, wind or man.

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-   The determination of 50 percent or substantial damage is based on
    the following:

    -   Repair costs would equal or exceed 50 percent of the building's
        predisaster value.

        -   Repair costs include everything needed to restore a building
            to its predisaster condition.

        -   Repair costs include appliances, lighting, carpeting,
            cabinets, tile and any required demolition.

        -   Repair cost include all structural, labor and finish costs,
            including the owner's labor.

-   The building's value is the market value of the structure only.

    -   The building's value does not include land or accompanying
        improvements, such as landscaping, swimming pools, cabanas,
        paving or the building's assessed value

    -   The building's value is not the assessed value, which can be
        less than market value.

Replacement value must be based on comparable sales and depreciation,
taking deterioration into account.