What is the significance of a property being located in a FEMA 'Special Flood Hazard Area' (100-year floodplain)?
Why Properties in SFHAs require federal flood insurance if they have a federally backed mortgage, and must be disclosed to buyers Is Correct
Answer B: Properties in SFHAs require federal flood insurance if they have a federally backed mortgage, and must be disclosed to buyers
Exam Tip: Environmental
Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.
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- California requires sellers of residential property to disclose whether the property is located in a Special Flood Hazard Area. This information is found on:Environmental
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Key Terms to Know
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
State-Specific Concepts
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