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Chapter 8 › IX.C Facility Located in a Special Flood Hazard Area

Why would FEMA cut funding for an uninsured building in a flood zone?

FEMA term
NFIP reduction in special flood hazard areas
Short answer

For an insurable building in a special flood hazard area that is damaged by flooding and uninsured, FEMA must reduce funding by the maximum NFIP policy payout or the value of the building and contents, whichever is less.

What FEMA requires

  • The reduction applies when the area has been mapped as a special flood hazard area for more than one year.
  • If you believe the map is wrong, request a Letter of Map Amendment or Revision within 6 months of the declaration. If approved, funding can be reinstated. Costs of pursuing it are ineligible.
  • Nonprofit facilities in non-participating communities aren’t reduced, but the community must join the NFIP within 6 months and the nonprofit must buy flood insurance.

Documentation

Flood insurance policies, flood maps, and any map amendment request and decision.

Watch out · Govstar practitioner advice

Check flood zone status and NFIP coverage for every insurable building now. This reduction can wipe out most of a building’s funding.

Govstar summarizes FEMA’s Public Assistance Program and Policy Guide in plain language and links to the official text. Govstar is independent and not affiliated with FEMA. This is general guidance, not legal advice.