Loan Guaranty: Flood Insurance Requirements

The Department of Veterans Affairs (VA) is amending its loan guaranty regulations regarding loans in areas having special flood hazards. This action is required by statute to implement the provisions of the National Flood Insurance Reform Act of 1994, Title V of Public Law 103-325. VA is amending its regulations to strengthen requirements for procuring and maintaining flood insurance on properties in areas having special flood hazards which secure loans guaranteed by VA, and to include new requirements for VA as a ``Federal agency lender.'' The new requirements include escrow requirements for flood insurance premiums, the requirement to ``force place'' flood insurance under certain circumstances, enhanced flood hazard notice requirements, new authority for VA to charge fees for determining whether a property is located in a special flood hazard area, and various other provisions necessary to implement the National Flood Insurance Reform Act of 1994.