Q: The July 2015 Flood Final Rule contains a detached structure exemption. Does that exemption only apply to consumer purpose loans?
A: No. This exemption is also available for business, commercial or agricultural purpose loans if secured by a residence. The preamble to the final rule included this discussion: “The Agencies acknowledge that, with respect to flood insurance, the purpose of a loan may be immaterial to the borrower when the borrower uses his or her residence to secure the loan. Therefore, the Agencies agree with commenters that the detached structure exemption should be available in connection with consumer loans as well as those made for business, commercial, or agricultural purposes if the loan is secured by a residence.”