Escrow & Title
In Delaware, what triggers the mandatory purchase of flood insurance for a residential mortgage?
AAny property within one mile of a body of water
BThe property is located in a FEMA-designated Special Flood Hazard Area and the loan is federally backed✓ Correct
CAny property with a basement
DProperties within Delaware's coastal zone only
Explanation
Federal law requires flood insurance for federally backed mortgage loans (FHA, VA, Fannie Mae, Freddie Mac, USDA) when the collateral property is located in a FEMA-designated Special Flood Hazard Area (100-year floodplain).
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