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When can lenders or servicers charge the borrower a fee for making a flood zone determination?

There are four instances under the National Flood Insurance Act (NFIA) when the lender or servicer can charge a fee for a flood determination:

  1. When the determination is made in connection with the making, increasing, extending, or renewing of a loan that is initiated by the borrower.
  2. When the determination is prompted by a revision or updating of floodplain areas or flood-risk zones by the Federal Emergency Management Agency (FEMA).
  3. When the determination is prompted by FEMA's publication of notices that affect the area in which the secured property is located.
  4. When the determination results in force placement of insurance.

The loan agreement or other contractual documents between the parties may also permit the imposition of fees.

Refer to 42 USC 50 "National Flood Insurance Act."

Last Reviewed: April 2021

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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