Environmental

A Connecticut commercial property is located in a 100-year flood plain. The property currently lacks flood insurance. A buyer who obtains a federally related mortgage:

AMay choose whether to obtain flood insurance
BIs required by federal law to maintain flood insurance as a condition of the mortgage✓ Correct
COnly needs flood insurance if FEMA specifically requires it for that property
DMust elevate the building before purchasing flood insurance

Explanation

Federal law (the National Flood Insurance Reform Act) requires that lenders making federally related loans on properties in Special Flood Hazard Areas (100-year flood plains) require the borrower to obtain and maintain flood insurance as a condition of the loan.

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