If both buildings located in the flood zone have at least two rigid walls and a roof and are affixed to the land, then we believe that flood insurance will be required.

The flood insurance requirements apply to loans secured by a “building,” defined as “a walled and roofed structure, other than a gas or liquid storage tank, that is principally above ground and affixed to a permanent site . . . .” We believe that the term “building” would include a storage structure that has only two walls; as FEMA’s Flood Insurance Manual explains, flood insurance can be obtained for a structure with “2 or more rigid walls and a fully secured roof . . . .” Similarly, the term “building” would include a prefabricated building, provided that the building is fixed to a permanent site.

For resources related to our guidance, please see:

• FDIC Flood Insurance Regulations, 12 CFR 339.3(a) (“An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan.”)

• FDIC Flood Insurance Regulations, 12 CFR 339.2 (“Building means a walled and roofed structure, other than a gas or liquid storage tank, that is principally above ground and affixed to a permanent site, and a walled and roofed structure while in the course of construction, alteration, or repair.”)

• FEMA Flood Insurance Manual, General Rules, page 3 (“Insurance may be written only on a structure with 2 or more outside rigid walls and a fully secured roof that is affixed to a permanent site.”)