Environmental
The National Flood Insurance Program (NFIP) in Arizona requires flood insurance for properties:
AIn all Arizona counties
BLocated in Special Flood Hazard Areas (100-year floodplain) with federally backed mortgages✓ Correct
COnly in riverfront communities
DWith basements
Explanation
NFIP requires flood insurance for properties located in Special Flood Hazard Areas (FEMA-designated 100-year floodplain) when the purchase is financed with a federally backed mortgage.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
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