Environmental
In Illinois, the presence of a 100-year floodplain on a property affects a real estate transaction in which of the following ways?
AThe property cannot be sold or insured
BThe buyer must obtain National Flood Insurance Program (NFIP) coverage if using a federally backed mortgage✓ Correct
CThe seller must remediate all flood damage before closing
DThe property is automatically exempt from property taxes
Explanation
Properties located in FEMA-designated Special Flood Hazard Areas (100-year floodplain) with a federally backed mortgage (FHA, VA, Fannie Mae, Freddie Mac, or federally regulated lender) are required to carry flood insurance through the National Flood Insurance Program (NFIP). Illinois has numerous communities in floodplains, particularly in the Chicago area and along the Illinois River. Flood insurance can add significant cost to homeownership in these areas.
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