Environmental

A West Virginia property is in a 500-year floodplain (Zone X-shaded). The lender:

AMust require flood insurance by federal law
BMay not require flood insurance but may recommend it as a precaution✓ Correct
CMust deny the loan if the property is in any flood zone
DMust charge double the standard interest rate

Explanation

Federal law mandates flood insurance only for properties in Special Flood Hazard Areas (100-year floodplain, Zone A or V). Properties in Zone X-shaded (500-year floodplain) are not subject to the mandatory purchase requirement, though lenders may encourage coverage.

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