Home construction loan in a flood zone

[Stx14]

I was wondering if it would be possible to obtain a  home construction loan for building a home on land that is located in a flood zone.  I own the property out right and want to build my future home on it.   It is located in south Texas .  The entire town is now considered to be in a flood zone after the fema maps were re zoned in 2012.  My property is 50 acres and level.  It is not in a creek or in a hole. Of course, I don't consider it to be flood prone. The reason for the flood zone is the towns proximity to the rio grande river( my 50 acres are almost a mile away from it).  My wife and I have excellent credit but our concern is that we will have to jump though many hoops to obtain a construction loan due to home site being in a flood zone.  So far I am in talks with capital farm credit about this loan.  Is it possible to get this loan?  Any advice or info would  be greatly appreciated.

[Anonymous]

Flood insurance will be expensive. You should talk to a real estate agent about the size & type of home you want to build & building features that reduce the risk of flood & lower the cost of flood insurance. You will need an elevation survey to find out where your potential homesite sits compared to the base flood elevation. Building a certain number of feet ABOVE the base flood elevation, for example on stilts, greatly helps.

[Anonymous]

Insurance agent. Not teal estate. Tired brain this morning.

[Stx14]

Hey thanks for the info.  Do you know if I will have to elevate the house pad(dirt) to a certain height or is every lender going to want something different.  I'm gonna try to go the conventional home/construction loan and not fha. I'm not sure if that makes any difference.  Looking for all the info and advice I can get

[Anonymous]

I would ask the lender you are currently working withwhat they would require because lenders can have their own overlays.  I would imagine though if you got flood insurance you would be fine.  Also something else to consider would be a Letter of Map Amendment(LOMA).  It might be hard to do in your area but if you can prove after you have the elevation survey done that your home wouldn't be affected then you could file for the LOMA and see if they will amend the flood map so then you wouldn't have to have flood insurance. It's probably a long shot but something else to consider.

[Anonymous]

Special Flood Hazard Areas are all about the base flood elevation & how much above or below the lowest floor of the home sits compared to it. It's not a lender thing. It's a National Flood Insurance Program thing.

[Anonymous]

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@Stx14 wrote:

Hey thanks for the info.  Do you know if I will have to elevate the house pad(dirt) to a certain height or is every lender going to want something different.  I'm gonna try to go the conventional home/construction loan and not fha. I'm not sure if that makes any difference.  Looking for all the info and advice I can get

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Chances are yes. You can look at the FEMA map and it will tell you where you sit in the flood zone. 

A coworker just just went through this and told me all about it. His property on the gulf coast of Texas is classified zone AE. They found the highest elevation on his property and told him he needed to be 2.5' above that point. Unfortunately, where he wanted to build his house was a little over a foot lower so he will have to build a dirt pad about 3.5-4' high. 

[Stx14]

Well then, I'll most likely be piling up a large pad of dirt for the future home site. Keeping our fingers crossed that everything will work out .

[Anonymous]

You may not have to do anything too crazy, but a nice pad is always advisable. Good luck! 

[Anonymous]

You really need to hire a surveyor & get a flood elevation survey done. Show him your proposed site. He'll tell be able to provide you with the base flood elevation for the zone your land is in & how high above or below that elevation your proposed site sits. If your proposed site is BELOW the base flood elevation, you wool need to plan to build your house elevated, probably on stilts. If the proposed site is AT the base flood elevation, building up the land through means like a higher dirt pad might be enough. If the proposed site is AT LEAST 3 FEET above the base flood elevation, you'll probably be just fine with normal site prep work.