Mandatory Purchase

Under the provisions of the Flood Disaster Protection Act of 1973, individuals, businesses and others buying, building or improving property located in identified areas of special flood hazards within participating communities are required to purchase flood insurance as a prerequisite for receiving any type of direct or indirect federal financial assistance (e.g., any loan, grant, guaranty, insurance, payment, subsidy or disaster assistance) when the building or personal property is the subject of or security for such assistance.

In other words, if you purchase a home or business in the SFHA using any type of federally-backed financial assistance (direct or indirect), you will be required to purchase flood insurance for the duration of the assistance term.