What to know before buying a house in a flood zone

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You always dreamed of living near a body of water, but in your dreams you probably weren’t considering the risk of flooding. They may look beautiful, but bodies of water can be extremely perilous for your home.

According to FEMA (Federal Emergency Management Agency), just one inch of floodwater in your home can cause up to $25,000 in damage. If you’re living in a flood zone, you have to consider the risks and consequences of not mitigating those risks.

Just because a house is in a flood zone doesn’t mean you should rule out buying, you just have to prepare your offer and consider the future accordingly.

What is a flood zone?

A flood zone is a geographic area that FEMA has designated as having an elevated risk of flooding. FEMA designates flood zone areas as higher risk or moderate- to low-risk using the following classification system:

  • Special Flood Hazard Areas (SFHAs) begin with the letters A or V and are defined by FEMA as areas that have at least a one in four chance of flooding during a 30-year mortgage. That’s a 1% or higher chance of experiencing flooding each year. Zone V indicates the zone is in a coastal area while A is reserved for inland areas.
  • Non-SFHAs begin with the letters B, C, or X and are defined as zones that receive one-third of federal disaster assistance for flooding. These zones are not likely to flood frequently, but it’s possible.

How to find out if a home is in a flood zone

Think a home you’re interested in buying might be in a flood zone? It’s easy to find out. FEMA’s Flood Map Service Center is an easy-to-use, free tool that will tell you the area’s flood zone designation.

You can also ask your real estate agent if a home is in a designated flood zone and what that designation may mean if you purchase the property. It’s important to find this out before making an offer on a home.

→ Related: 19 questions to ask when buying a house

Can I get a mortgage for a house in a flood zone?

There are more flood zones in the country than you might expect. So yes, you can get a mortgage for a house in a flood zone — it’s essentially the same process that you would take to get a mortgage on any house.

The biggest difference is that if you’re using a mortgage to purchase a home in an SFHA, most lenders will require you to purchase flood insurance. This is separate from normal home insurance and the extra premium is usually rolled into your monthly mortgage payment.

What is flood insurance?

Flood insurance protects you and your lender in the event of a flood that causes damage to the property. There are two basic types of flood insurance: Government-backed insurance via the National Flood Insurance Program (NFIP) or private flood insurance.

NFIP insurance meets the minimum requirements for any government-backed mortgage, providing coverage for up to $250,000 in damage to your home and an additional $100,000 for items inside the home like furniture, electronics, and personal items. It’s available in 23,000 communities nationwide.

Private flood insurance is for people who don’t live in participating NFIP communities or who feel like they need more coverage than what’s offered by NFIP. With private flood insurance, you can insure up to 100% of property value and personal belongings and customize your coverage to include alternative living expenses.

Even if your lender doesn’t require flood insurance, it might be worth the investment. Ask your agent or the seller if they have flood insurance or if they’ve experienced flooding while living in the home.

Risks of buying a home in a flood zone

When you buy a home in a SFHA area, the biggest risk is, of course, that your house floods. Flooding can lead to major structural damage or mold growth in your home — expensive problems to fix. A flood may force you to relocate temporarily while you rebuild or repair your home or even find a new permanent home.

Even small floods may force you to replace floors and drywall or replace damaged furniture and personal belongings. Beyond the financial implications, floods can be emotionally or sentimentally damaging as well.

Here are a few more risk to consider if you live in a flood zone:

Expensive flood insurance

Before you make an offer, you’ve consulted with your lender and carefully calculated exactly how much house you can afford. But then you get a flood insurance quote.

In 2022, NFIP flood insurance cost an average of $771 a year. Private insurance may cost even more. If your home is in a SFHA area, you will almost assuredly have to get flood insurance, which probably means a more expensive monthly mortgage payment. If you’re already at the top of your budget, another $50 a month month could hurt.

Difficult resale

You’re thinking about buying a home in a flood zone but that doesn’t necessarily mean everyone wants to do the same. Many buyers hesitate to buy a home located in a high-risk flood zone because of the associated risks, of course, but also because they’re more expensive to insure. That could make it harder to sell at the price you’d like.

From the buyer’s perspective, however, you may be able to get a good deal on a beautiful home if you’re willing to accept some risk. Just make sure to ask the right questions about how frequently the seller has experienced flooding and what kind of flood mitigation they and the community have implemented.

Should I buy a home in a flood zone?

Like any home purchase, buying a home in a flood zone is a major decision not to be taken lightly. Only you can decide whether buying a house in an SFHA is the right move. How much do you love the house? What is your tolerance for risk? How seriously does the community combat flooding? These are all questions you’ll have to answer before moving forward.

While homes in flood zones are risky to own and often expensive to insure, you might be able to get one for a good price. (And let’s not forget that the flood zone may have a stunning waterfront view.)

If you’re prepared to take action to mitigate flood damage in your home and can afford the cost of insurance, living in a flood zone might not be an issue. But it’s important to gather as much information about the property as you can so you can make an informed decision that’s right for you and your family.

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