Flood Insurance
What this clause says
For any building located in a Special Flood Hazard Area, the Association shall maintain flood insurance covering the building and common elements in an amount at least equal to the lesser of the maximum coverage available under the National Flood Insurance Program or the full replacement cost of the insured buildings.
What this means in plain English
Standard property policies exclude flood, so flood is covered separately, either through the National Flood Insurance Program (NFIP) or a private flood market. The Fannie Mae Selling Guide requires flood insurance on any project building located in a Special Flood Hazard Area (SFHA), a FEMA-designated high-risk flood zone, as a condition of warrantability. Coverage must generally equal the lesser of the NFIP maximum or the building replacement cost.
What it means for an HOA board
Flood status is binary for warrantability: if any building sits in a Special Flood Hazard Area and lacks required flood coverage, conventional loans on those units are not warrantable, and sales stall. Confirm each building against the current FEMA flood map, because map revisions move buildings into and out of the SFHA over time. Outside the SFHA, flood is optional but worth considering, since a meaningful share of flood losses occur outside mapped high-risk zones.
Program notes
Private flood markets can beat the NFIP limit and price for larger structures, but confirm the private policy is accepted for warrantability where a lender requires NFIP-equivalent terms.
How this evaluates
The Policy Checker applies these rules in order; the first match wins.
has flood is set -> Compliant: Flood coverage is in place. Confirm the limit meets the lesser of the NFIP maximum or building replacement cost where a building sits in an SFHA. has flood is not set -> Borderline: No flood coverage recorded. This is a warrantability gap only if a building is in a FEMA Special Flood Hazard Area; confirm each building against the current flood map.
See this in your policy
Check this clause against your master policy.
Run the Policy Checker