Removal from flood program is creating real consequences for lake property

Lenders and realtors on Lake Anna are worried sales of waterfront property will be all but paralyzed for the foreseeable future.

They warn that without access to federally subsidized flood insurance, people seeking to buy or sell parcels on the water may have to delay real estate deals as long as six to eight months.

That’s how long it can take nowadays for the federal government to confirm that a parcel on the lake is not in a floodplain and for a mortgage lender to issue a home loan without flood insurance, according to Gene Newman, a lender who does business at the lake for Fulton Bank.

The crisis for the real estate community on the lake started on Oct. 31, when the Federal Emergency Management Agency (FEMA) removed Louisa County from the National Flood Insurance Program. It did so after the Louisa County Board of Supervisors passed a new flood ordinance that did not meet FEMA’s minimum standards.

Newman has been dealing with FEMA for years. Until last month, he said, when the agency would claim a property was in a floodplain, a home buyer would purchase flood insurance in order to close on the property. Then the buyer would hire a surveyor to prove the home was not vulnerable to flooding by measuring its elevation above sea level. Once it had this evidence, FEMA would refund the cost of the insurance payments.