Flood insurance from the NFIP (National Flood Insurance Program) is available to renters and home owners if the property is located in a NFIP participating community. If you are taking out a mortgage on a home, and you are in a FEMA Special Flood Hazard Zone, the lender will require that you obtain flood insurance. ![]() Most people realize that if they buy a property that offers water frontage, there is an inherent risk of flooding. This generally has little if any negative impact on value because of the trade-off in the desired view and water access. It is very common for at least a portion of waterfront properties to be in a FEMA Special Flood Hazard Zone. This is especially true in areas that were already designated as being in a FEMA flood hazard zone to begin with. The flooding may be from a street’s proximity to a body of water or flooding that is generated from changes in land use.įor instance, a new development may be built in such a way that the rain run-off is inadequately engineered so that excess run-off water flows into surrounding streams and rivers, creating more frequent flooding in neighborhoods. There are some neighborhoods that are notorious for flooding. It is usually in areas in which major flooding occurs often. There are situations in which being located in a FEMA Special Flood Hazard Zone generally does impact value negatively. However, much of the time, at least in my experience, there is little if any significant impact on market value in this situation. Comparable sales in similar situations need to be examined to see if there is any impact on market value. The appraiser has to make this determination by comparing the property being appraised to other comparable sales. ![]() If the dwellingis not in a hazard area, but other portions of the lot are, it is less likely that the market value of the property will be affected. If your dwelling is in a Hazard Zone, there is a higher likelihood that the market value may be affected. It is important to determine if the dwelling itself is in a Hazard Zone. Sometimes there is just a small portion of the land that is in a Hazard Zone. So that’s why, in this article, I refer to zones other than zone X as being in a “Hazard Zone”. Zone X is not considered to be a Hazard Zone. WHERE YOUR DWELLING IS LOCATED CAN MAKE A DIFFERENCEįairly often I appraise homes in which a portion of the property is located in a FEMA Special Flood Hazard Area or Zone. That’s an important distinction to remember. Not how many times this kind of flood will take place in a 100 year period. ![]() Remember, the statistics are based upon the estimated percentage of chance that this type of flood may occur in a given year. So there may be years in which there were two “100-year floods” in a row. If you are in a 100-year flood zone, that means that there is a 1 in 100 (or 1%) chance that a flood of the magnitude determined by the USGS, will take place in any given year. It really comes down to the statistics and the recurrence intervals of floods. The USGS collects data to determine the largest floods in a designated area each year. The estimates of the flood quantities are calculated using actual data collected at the site.” The explains: “On a given river, the flood quantile corresponding to the 50-year flood might be 10,000 cfs, and the flood quantile corresponding to the 100-year flood might be 15,000 cfs. The USGS (United States Geological Survey) measures the amount of water, based upon a cubic feet per second (cfs), during a flood. The flood designations are based upon data called a “flood quantile”. The FEMA Flood Maps were created primarily for flood insurance purposes. Perhaps you are wondering, what a flood zone is? FEMA has designated certain areas to be at higher risk for flooding. ![]() I know, I know! Appraiser’s always say that! That’s because in most situations in which value is being determined, there are many things to consider. The answer to the opening question regarding value is that it depends. In fact, I see this on a fairly regular basis. Do you know if your home is in a FEMA Special Flood Hazard Area (SFHA)? Does it make a value difference? I recently appraised a home in which the lot was located in numerous flood zones.
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