The Federal Deposit Insurance Corporation, alongside the Farm Credit Administration, Federal Reserve Board, National Credit Union Administration and Office of the Comptroller of the Currency, issued a reminder that lenders may continue to originate loans subject to the federal flood insurance statutes when the National Flood Insurance Program (NFIP) is unavailable, and may do so without requiring federal flood insurance during the lapse. The agencies pointed institutions to Q&A Applicability 12 of the Interagency Questions and Answers Regarding Flood Insurance, which clarifies that lenders must still make flood determinations, provide timely, complete and accurate notices to borrowers, and comply with other applicable parts of the flood insurance regulations. Institutions should also evaluate safety and soundness and legal risks and prudently manage those risks during the lapse period, and the guidance addresses the availability and use of private flood insurance.
Federal Deposit Insurance Corporation 2025-10-01
US Federal Deposit Insurance Corporation and other federal regulators remind lenders they can make flood statute loans during National Flood Insurance Program lapses without requiring federal flood insurance
The Federal Deposit Insurance Corporation and other federal agencies reminded lenders they can originate loans under federal flood insurance statutes even when the National Flood Insurance Program is unavailable, without requiring federal flood insurance. Lenders must still conduct flood determinations, provide accurate borrower notices, and comply with flood insurance regulations. Institutions are advised to assess and manage safety, soundness, and legal risks, and consider private flood insurance options during the lapse.