Under new Federal guidelines borrowers with a loan closing date on or after Jan 1st will be required to escrow funds with their mortgage lender or servicer to cover flood insurance premiums and fees if the property is located in a Special Flood Hazard Area in a community participating in the National Flood Insurance Program.

Guidelines currently in effect allow borrowers to choose whether to escrow funds.

Borrowers with loans that closed prior to Dec 31st who do not currently escrow funds must begin to do so at the time their current flood insurance policy is due for renewal.