Environmental

A West Virginia property located in a FEMA-designated Special Flood Hazard Area (SFHA) has which implication for mortgage borrowers?

AThe mortgage interest rate is automatically lower
BThe borrower with a federally backed mortgage is required to purchase flood insurance✓ Correct
CThe property cannot be mortgaged at all
DThe property tax is capped by federal law

Explanation

Properties in FEMA-designated Special Flood Hazard Areas (100-year floodplains) that are financed with federally backed mortgages require the purchase of flood insurance under the National Flood Insurance Program (NFIP).

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