Which statement most accurately describes flood disclosure requirements and flood insurance obligations in Iowa real estate transactions?
Correct Answer
B) Iowa has significant flood zones along major rivers; FEMA flood zone status must be disclosed, and flood insurance is required for federally backed loans on properties in Special Flood Hazard Areas
Iowa has significant flood risk, particularly along the Iowa, Cedar, and Des Moines rivers. The 2008 floods caused catastrophic damage to Cedar Rapids and Iowa City. Sellers must disclose FEMA flood zone status as a material fact. Federal law (the National Flood Insurance Act) requires flood insurance for properties located in Special Flood Hazard Areas (SFHAs) when the buyer obtains a federally backed mortgage; it is not universally required for all Iowa properties.
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