Flood insurance

Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.

Source: U.S. Department of Housing and Urban Development

A form of insurance that protects the owner of the insured property against losses stemming from flood damage. The Federal Flood Disaster Protection Act of 1973 requires that federally-regulated lenders determine if real estate to be used to secure a loan is located in a Specially Flood Hazard Area (SFHA). If the property is located in a SFHA area, the borrower must obtain and maintain flood insurance on the property. Most insurance agents can assist in obtaining flood insurance.

Source: Ginnie Mae

Last reviewed October 2022