Fannie Mae DUS | 2026-10-18

Fannie Mae Flood Deductibles Start With the Building Count

The current Guide applies different private-flood deductible caps based on how many buildings are in the SFHA and ties the answer to the flood determination record.

Fannie Mae's current Multifamily Guide, Section 502.03, requires the lender to determine whether any property buildings are fully or partially located in a Special Flood Hazard Area. The operating procedures call for the FEMA Standard Flood Hazard Determination Form, evaluation of all property structures, supplemental vendor information that includes the legal description and survey or site plan, an image overlay from the flood vendor, and a resulting Flood Zone Determination that remains effective for the mortgage-loan term.

The private-flood deductible table turns on the number of buildings in the SFHA. For a property with 10 or fewer such buildings, the maximum deductible is $50,000 per building. For a property with more than 10 buildings in the SFHA, the maximum deductible is $500,000 per occurrence. The Guide separately permits the maximum deductible available under an NFIP policy and caps a business-income flood deductible at 15 days when stated in time or $100,000 when stated in dollars.

Coverage amount and deductible review should stay together. When coverage available under the NFIP is insufficient, the Guide requires the borrower to purchase excess flood insurance for the difference up to the required coverage amount. It also states that removing a property or building from an SFHA requires an updated FEMA flood determination based on a Letter of Map Amendment, Letter of Map Revision, or Letter of Determination Review.

For borrower-side counsel, the closing checklist should identify every building, mark which buildings are fully or partially in the SFHA, reconcile that count to the survey or site plan and flood-vendor materials, confirm whether the private-policy deductible is per building or per occurrence, and track any required excess coverage or pending map-change evidence. A single building schedule shared with the lender, insurance consultant, and survey team can prevent a late mismatch. This note is informational only and is not legal advice for any specific transaction.