No, we believe that obtaining one flood determination per building is sufficient, unless more than seven years have passed or the applicable flood maps have been revised since the original flood determination for that building was obtained.

The flood insurance regulations require lenders to obtain a flood determination whenever a building (or mobile home) will be collateral securing a loan. Because this responsibility applies to buildings, and not to individual units within buildings, we do not believe it is necessary to obtain more than one flood determination per building. We discussed this question (without using identifying information for you or your bank) with an expert at the National Flood Insurance Program (NFIP), who confirmed that flood determinations generally will cover an entire building and are not limited to a single unit within a building. There are some exceptions, such as for townhouses that are connected but have separate firewalls, utilities and addresses. But in this case, where the condominium units within a building share a single address, the original flood determination likely covers the entire building (and you may be able to confirm this fact by reviewing the original flood determination).

However, there are limitations on reusing flood determinations. A flood determination cannot be reused if it is more than seven years old or if the relevant flood maps for the property have been revised or updated since obtaining the original flood determination. Before reusing a flood determination, your bank should ensure that it is no more than seven years old and that the applicable flood maps are unchanged.

We should note that in general, draws on a line of credit do not trigger the flood determination requirement. But in this situation, the borrower’s draws are resulting in purchases of new loan collateral, which is why we recommend documenting a flood determination for each condominium purchase — by either reusing the existing flood determination or obtaining a new determination if the circumstances require.

For resources related to our guidance, please see:

• FDIC Flood Insurance Regulations, 12 CFR 339.6(a) (“An FDIC-supervised institution shall use the standard flood hazard determination form developed by the Administrator of FEMA when determining whether the building or mobile home offered as collateral security for a loan is or will be located in a special flood hazard area in which flood insurance is available under the Act. . . .”)

• 42 USC 4104b(e) (“Any person increasing, extending, renewing, or purchasing a loan secured by improved real estate or a mobile home may rely on a previous determination of whether the building or mobile home is located in an area having special flood hazards (and shall not be liable for any error in such previous determination), if the previous determination was made not more than 7 years before the date of the transaction and the basis for the previous determination has been set forth on a form under this section, unless (1) map revisions or updates pursuant to section 4101(f) of this title [42] after such previous determination have resulted in the building or mobile home being located in an area having special flood hazards; or (2) the person contacts the Administrator to determine when the most recent map revisions or updates affecting such property occurred and such revisions and updates have occurred after such previous determination.”)

• Interagency Q&As Regarding Flood Insurance (July 21, 2009), Question 68 (“ . . . if the same lender makes multiple loans to the same borrower secured by the same improved real estate, the lender may rely on its previous determination if the original determination was made not more than seven years before the date of the transaction, the basis for the determination was set forth on the SFHDF, and there were no map revisions or updates affecting the security property since the original determination was made.”)

• FRB Philadelphia, Consumer Compliance Outlook, Flood Insurance Compliance Requirements (4Q 2011) (“The NFIP offers a specific insurance policy for a residential condominium complex — defined as a building having 75 percent or more of its floor area in residential use — known as the Residential Condominium Building Association Policy (RCBAP). This policy, which can only be purchased by condominium owners’ associations, covers all individual units (including improvements) and common property.”)

• Interagency Q&As Regarding Flood Insurance (July 21, 2009), Question 35 (“35. Does a draw against an approved line of credit secured by a building or mobile home, which is located in an SFHA in which flood insurance is available under the Act, require a flood determination under the Regulation? Answer: No. While a line of credit secured by a building or mobile home located in an SFHA in which flood insurance is available under the Act is a designated loan and, therefore, requires a flood determination before the loan is made, draws against an approved line do not require further determinations. However, a request made for an increase in an approved line of credit may require a new determination, depending upon whether a previous determination was done. (See response to question 68 in Section XIII. Required use of Standard Flood Hazard Determination Form.)”)

• 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. . . .”)

• Interagency Q&As Regarding Flood Insurance (July 21, 2009), Question 57 (“The Act and Regulation require a lender to force place flood insurance, if all of the following circumstances occur: The lender determines at any time during the life of the loan that the property securing the loan is located in an SFHA; . . .”)