House on floodplain,property loan questions

Discussion in 'Homesteading Questions' started by Unregistered-1427815803, Mar 10, 2004.

  1. My son is trying to purchase a house and property that is in a 100 yr floodplain. I have lived next door for over twenty years and never saw the creek even get close to the house on the property or my house either. The bank will not lend money without flood insurance. Just wondering if anyone has had any experiences good or bad with this problem.Any advice or input would be appreciated. We live in nw alabama.
  2. RAC

    RAC Guest

    If you go to the FEMA website, they have lots of info on floodplains and what "100 year floodplain" really means--they even use a new term for it.

    Me, I wouldn't buy anything in a floodplain, unless it is on the coast (have to take the good with the bad), but that's me. And you're right, people can live there for years and never have a flood, but you can also have flooding three years in a row.

    The flood insurance requirement is really to protect the lender, not the borrower. If you own your house outright, there isn't even a requirement to have fire insurance, but most people do. So you wouldn't have to have flood, either, but many choose to.

    As long as there is a mortgage on it (and I don't think even if you were 90% paid off you could get out of the requirement), you will have to have it, and it will probably be paid out of an impound account. If he does put enough down to avoid the impound accounts, and pays premiums himself, if he cancels the policies they will notify the mortgage holder, and they can probably call the note due and payable immediately, which is not a good thing.

    I take it he is buying because it is next door to you? If he does buy it, there is nothing to prevent him from taking some preventive measures to shore up the property--planting more trees to help prevent soil erosion, making sure any creek drain pipes are clear and not dammed up by beavers, etc. I think a lot of small places get flooded because people don't take care of these things--heck, even in the city people are too lazy to kick a few leaves out of the way of the storm drains and the streets get flooded sooner rather than later.

    Good luck!

  3. oz in SC

    oz in SC Well-Known Member

    May 13, 2002
    SC and soon to be NC
    Where we live almost EVERYTHING is in the flood plain-a result of living in the lowcountry of SC I guess :)

    Anyway we have flood insurance and it is basically just ANOTHER yearly expense-no real problem getting insured(unlike homeowners insurance around here) just costly.

    I am not sure what your circumstances are but we are within five minutes of the ocean and the highest point in the county is 34 feet above sea level soooo not much chance of ANYTHING surviving a hurricane.

    So IF it is along the coast you don't have much choice,if however it is along a river or such I would be more concerned.
  4. countrygrrrl

    countrygrrrl PITA

    Aug 4, 2003
    Zone Unknown
    I would surely check to FEMA site. And I would surely think twice about living in a flood plain. :no: I lived in Tulsa during the floods in the 1980's and it was pretty unbelievable -- entire neighborhoods under water, I knew people who, during one of the floods, literally hung onto telephone poles and trees for dear life in the middle of the city. During the first flood, we stayed up late and watched the reports - firetrucks out trying to rescue people were being washed away.

    Needless to say, many people had many thousands of dollars worth of damage to homes, cars, vehicles.

    And those floods had nothing on other floods, like the Mississippi flooding and what went on up north.

    Floodplains are nice when it's not flooding. And, if you all are lucky, you'll end up living on a floodplain between floods. But you don't want to have your home there when it finally decides to start flooding. You'll likely lose most everything.
  5. Ken Scharabok

    Ken Scharabok In Remembrance

    May 11, 2002
    In the 12 or so years I have owned this farm we have had three 50-year floods. Why? When they built KY Lake they backed up the Duck River. When they backed up the Duck River they greatly reduced the drop of Blue Creek. Blue Creek drains a large watershed area. Thus, when conditions are right water coming down the creek spreads sideways more that it did before they put in the lake.

    Some people plan on getting flooded out every so often. The basic living stucture of the house is at the second floor level. First floor is a wash-through garage/basement. Some even have windows designed to be blown out by floodwaters.

    Ken S. in WC TN
  6. SueD

    SueD Well-Known Member

    Aug 1, 2002

    We were looking at a house that required flood insurance. We didn't buy.

    In our area, there is no getting out of it - no way no how - even the private lenders wouldn't touch it without the 'required' insurance... But, it would only have cost us an extra $20 a year if we HAD done it. Good luck to your son!!! I hope he can work through it and get the place he loves!

  7. RAC

    RAC Guest

    I have been told that at the coast if you're building a 2 or more level house it must be garage on the bottom floor--no living area. I don't know if there are any exceptions for say, mother-in-law suites, especially when a lot of people who are older just don't want to climb stairs anymore.

    I think it is the FEMA program's way of cutting costs by limiting what can be there to be damaged in the first place.
  8. deberosa

    deberosa SW Virginia Gourd Farmer!

    Dec 13, 2003
    Floyd County, VA
    I bought a place in 1999 - wasn't on a flood plain. Then when I went to get a second in 2002 they decided it was and charged flood insurance. It was nowhere near a stream or anything, but was a quarter mile from a manmade lake.

    They forced me to get the FEMA insurance - very expensive! I went to my company and they said it would cost the same through them but that you can challenge the decision, especially since he knew this was not on a flood plain a few years earlier. They just take broad swipes at what they identify as flood plains with not much distinction as to the reality of the situation.

    I lived on top of a hill!

    My suspision was that the FEMA big wig that got on the community board had the designation changed as a way of weeding out po' folk in the community. I simply moved and let the next owner deal with it.

    So find out when the designation was set and why before paying all of that. It was over $300 a year on just $27,000 of mortgage.
  9. mikell

    mikell Well-Known Member

    Nov 7, 2002
    South West MI
    I have several rentals in flood plains and no big deal really just more insurance. I don't put any utilties in the basements and warn the renters the basements may get wet. One home had about 6" last week but it was coming up the floor drain. Will plug the drain and put in a sump pump this summer.

  10. Wilhelm

    Wilhelm Well-Known Member

    May 31, 2003
    SW Nebraska
    I worked for GE capital flood for 5 years, and every piece of real estate has a flood determination done when you are trying to get bank financing. Fema has a flood map on just about every city, county, and podunk berg on the map. They are constantly being revised, and there is no getting around flood insurance if the bank wants it. It is the price you pay for living in a flood plain. It might not flood in your lifetime, but there is the remote chance, and that is what the bank is trying to guard against. They don't get paid to take unnecessary chances, so they cover all possibilities. If your son loves the place, and can cover the insurance, go for it. It doesn't hurt to cover your butt, just in case.