Environmental
A West Virginia property is located in a FEMA-designated 100-year flood plain. The buyer's lender will require:
AAdditional title insurance only
BFlood insurance as a condition of the loan✓ Correct
CA higher down payment
DApproval from WV DEP
Explanation
Federal law (the Flood Disaster Protection Act) requires lenders to mandate flood insurance for properties in FEMA-designated Special Flood Hazard Areas (100-year flood plain) when the loan is federally backed or from a federally regulated lender.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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.
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