A borrower's property is located in a moderate-to-low risk flood zone (Zone X). The loan is a conforming conventional loan for $200,000. What are the flood insurance requirements?
Correct Answer
C) Flood insurance is recommended but not required
Properties in moderate-to-low risk flood zones (Zone X) are not subject to mandatory flood insurance requirements under the Flood Disaster Protection Act. However, flood insurance is still available and may be recommended since flooding can occur outside of high-risk areas.
Why This Is the Correct Answer
Properties in moderate-to-low risk flood zones (Zone X) are not subject to mandatory flood insurance requirements under the Flood Disaster Protection Act. However, flood insurance is still available and may be recommended since flooding can occur outside of high-risk areas.
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