How does Flood Insurance Affect A Kentucky FHA Mortgage Loan Approval?

A woman stands in her flooded living room. There are a couple of inches of water over the floor and she has a shovel and water-proof boots on. The National Flood Insurance Program logo has been embedded into the top left corner of the photo.


Here are the facts about flood insurance in regards to FHA mortgage loans in Kentucky:

  1. A lender will require if the Kentucky home mortgage property is in a flood zone. High-Risk areas are A or V. Zone X doesn’t require it.
  2.  The flood zone is based on local elevation certificates. Sometimes the surveys on these certificates are old, and updates can be requested. There is usually a cost involved, but it can lower the Zone so it may be worth it.
    3. Kentucky Insurance companies think of floods as very different than the general public. Most people think flooding is when a body of water rises and gets into your house. Floods are defined as any ground-water entering a house from the outside. Even if you are not in a flood zone, groundwater damage won’t be covered by homeowner’s insurance.
    4. Kentucky Flood insurance is priced by FEMA regardless of what the company writes it. All rates will be the same and shopping won’t help. If one company has different rates, it will always be a difference in coverage.
    5. Flood insurance in Kentucky flood zones are expensive, but outside flood zones, it is more cost-effective. This is up to the individual to decide whether they want it or not.
    6. Flood insurance coverage does not begin until 30 days after the policy is bound and the Kentucky Mortgage has closed. New Purchase no waiting period.
    7. Kentucky Flood insurance costs are higher for non-owner-occupied property such as rental property.
    8. A customer in Kentucky can mitigate costs by only covering the property structure or contents only in the lowest floor.


What is the mobile home or manufactured home is located in a Flood Zone for a Kentuck FHA Mortgage Loan Approval?

If the finish grade beneath the Kentucky Mobile Home or manufactured home is at or above the 100 yr return frequency flood elevation, so the only other option to be eligible for FHA financing is if a LOMA is issued by FEMA.   Like I said, I do not know if FEMA will issue a LOMA, but worth a try.  Here are Kentucky FHA guidelines for mobile homes in Flood plains

(d) Eligibility for Manufactured Housing in SFHAs The finished grade level beneath the Manufactured Home must be at or above the 100-year return frequency flood elevation. If any portion of the dwelling, related Structures or equipment essential to the Property Value and subject to flood damage for both new and existing Manufactured Homes are located within an SFHA, the Property is not eligible for Kentucky FHA mortgage insurance unless the Mortgagee obtains:

  • a FEMA issued LOMA or LOMR that removes the Property from the SFHA; or
  • a FEMA National Flood Insurance Program (NFIP) Elevation Certificate (FEMA Form 086-0-33) prepared by a licensed engineer or surveyor stating that the finished grade beneath the Manufactured Home is at or above the 100-year return frequency flood elevation, and insurance under the NFIP is obtained.


When making a determination for flood insurance purposes, the controlling document is the current effective Flood Insurance Rate Map. FEMA understands that sometimes structures will be shown to fall within the flood hazard area on the flood map when in reality the structure is elevated above the flood hazard. FEMA has created a process called the Letter of Map Amendment (LOMA) where they will review the elevation of the structure to determine if it can be removed from the flood hazard.


FEMA specifically reviews the Lowest Adjacent Grade and compares it to the Base Flood Elevation. Unfortunately, because FEMA says the FIRM is the controlling document, SLNF is not able to revise our determination until FEMA has amended the FIRM through the LOMA process. Because the elevation certificate has already been obtained, there will not be any additional cost to apply for the LOMA.


Below is a link to the FEMA website, where an instruction packet (How to fill it out, what to include, and where to send it) and the application can be found for the LOMA. You may also call the FEMA Map Information Exchange at (877) FEMA MAP with questions regarding the LOMA process.

The LOMA process generally takes 6-8 weeks to complete. The current year’s insurance premiums will be refundable through the National Flood Insurance Program (NFIP) if a LOMA removal is issued for the structure. Please let us know if you have any questions.

Thank you,