An appraiser finds that a small portion of the subject lot is mapped in a FEMA Special Flood Hazard Area (SFHA), but the dwelling (principal structure) sits entirely outside the SFHA. Under Fannie Mae Selling Guide B4-1.3-04 and B7-3-06, how is the SFHA item in the Site section answered, and how does that relate to the lender's flood-insurance determination?
Correct Answer
C) Report Yes for the site; the lender decides on insurance
Fannie’s Site guidance calls for Yes when any portion of the site is in the mapped SFHA. That is distinct from the lender’s flood-insurance determination under B7-3-06, which evaluates applicable principal and residential detached structures and other program conditions. A Yes site indicator alone neither proves nor waives a specific insurance requirement. Report the supported map information accurately.
Why This Is the Correct Answer
Option C is correct because the appraiser must check Yes when any portion of the site is in a FEMA Special Flood Hazard Area, even if the dwelling is outside it. The lender separately determines whether flood insurance is needed and has resources beyond the appraisal to make that decision. The Yes indicator neither proves nor waives an insurance requirement.
Why the Other Options Are Wrong
Option A: Report No, because the dwelling itself is outside the SFHA
Option A, reporting No because the dwelling itself is outside the SFHA, applies the wrong test. The Site-section question asks about any portion of the site, and part of this lot is mapped in the SFHA.
Option B: Report No unless the entire site lies inside the mapped SFHA
Option B, reporting No unless the entire site lies inside the SFHA, sets too high a threshold. The guidance calls for Yes when any portion of the site is in the SFHA.
Option D: Leave the mapping blank, because the lender holds that data
Option D, leaving the mapping blank because the lender holds the data, fails the appraiser's own reporting duty. The appraiser must report the supported flood map information, while the lender separately decides on insurance.
Any part means Yes
If any part of the site touches the mapped SFHA, the site answer is Yes. Insurance is the lender's separate call.
How to use: Use this when a question splits the lot and the dwelling across a flood zone line.
Exam Tip
Separate the appraiser's site reporting from the lender's insurance decision. Distractors often blend the two or focus only on the dwelling.
Common Mistakes to Avoid
- -Answering only about the dwelling instead of the whole site
- -Thinking the appraiser decides whether flood insurance is required
- -Leaving flood information blank on the assumption the lender has it
Concept Deep Dive
Analysis
This question tests the difference between the appraiser's flood zone reporting and the lender's flood insurance decision. Fannie Mae guidance says the appraiser checks Yes when any portion of the site is in a FEMA Special Flood Hazard Area. Whether flood insurance is required is a separate lender determination.
Background Knowledge
FEMA flood maps identify Special Flood Hazard Areas where the risk of flooding is higher. On Fannie Mae appraisals, the appraiser reports whether the site is in an SFHA based on the mapping. Flood insurance requirements depend on the lender's determination about the structures and program rules.
Real-World Application
An appraiser checks the FEMA map for a large lot and finds that the back corner along a creek is in a Special Flood Hazard Area while the house sits on higher ground. The appraiser checks Yes in the Site section and reports the map information. The lender then decides whether flood insurance is required.
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