The Quick Read: An LOMA (Letter of Map Amendment) removes the federal flood insurance mandate, but it does not force a DSCR lender to drop its own requirement. On most files we place, the lender or investor flood policy and the loan terms decide whether coverage stays. If coverage stays, the premium sits inside the payment and lowers your coverage ratio.
- A LOMA is a FEMA map correction for a structure on natural ground. It is not an insurance waiver.
- The lender can still require flood insurance after a LOMA. The loan terms control.
- Any flood premium that stays in the payment lowers your DSCR.
- Give the lender the actual letter, plus the elevation data behind it.
- Plan as if the LOMA will not arrive before your contract closing date.
DSCR (debt service coverage ratio) compares a property’s rent to its monthly payment. That payment is PITIA: principal, interest, taxes, insurance, and any association dues. Flood insurance is part of the “I.” So the flood question is really a ratio question.
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What Is a LOMA, Exactly?
An LOMA is a letter from FEMA saying a specific structure or parcel sits above the mapped flood risk, so the map should not have included it. FEMA runs the LOMA and LOMR-F process. Owners, renters, or lessees submit survey data and ask FEMA to remove the property from the Special Flood Hazard Area (SFHA), the high-risk zone on the flood map.
The core test is simple. FEMA’s LOMA tutorial says the lowest adjacent grade must sit at or above the Base Flood Elevation. Lowest adjacent grade means the lowest ground touching the structure. Base Flood Elevation is the height floodwater is expected to reach in a base flood. To remove a whole lot, the lowest point on the lot has to clear that elevation.
Most applicants need a licensed land surveyor or registered professional engineer to prepare an Elevation Certificate. Costs for that work vary by property and provider, so it is worth planning for as a real line item.
One variation helps. If the data show the structure is already outside the SFHA, FEMA calls it “out as shown,” and no elevation data is needed.
Key Terms Defined
LOMA: An FEMA letter saying a structure or lot on natural ground is not in the high-risk flood zone.
LOMR-F: An FEMA letter that changes the map for property raised by fill. It also needs the community to find the land reasonably safe from flooding.
LODR: A Letter of Determination Review. It checks only the property’s horizontal location against the mapped boundary, not elevation.
SFHA: The Special Flood Hazard Area, where federal flood insurance rules apply to certain loans.
Elevation Certificate: A surveyor’s or engineer’s document recording the building’s elevations.
Flood determination: The lender’s standard check of whether the property sits in a SFHA.
PITIA: Principal, interest, taxes, insurance, and association dues. This is the payment your rent is measured against.
LOMA, LOMR-F, and LODR: Which Tool Is Which?
They are not interchangeable. Each uses different evidence and produces a different result.
| Tool | Property situation | Evidence | Result |
|---|---|---|---|
| LOMA | Natural ground | Elevation data | Removes SFHA designation |
| LOMR-F | Raised by fill | Elevation plus community finding | Removes SFHA designation |
| LODR | Mapping boundary dispute | Location data only | Reviews the determination |
FEMA’s amendment process guide adds that fill must be permitted under law. If fill raised the building, an LOMA is the wrong route. An LODR does not amend the map at all. Only FEMA, through an LODR, LOMA, or LOMR, can change a lender’s flood determination.
Does a LOMA Remove Flood Insurance on a DSCR Loan?
It removes the federal mandate. It does not automatically remove the requirement on your loan. Once you hold an LOMA showing the property is outside the SFHA, the federal requirement no longer applies. FEMA adds that the lender can still require coverage as a condition of the loan.
Here is where the DSCR world differs from a bank mortgage. The federal flood law binds federally regulated lenders, as the interagency questions and answers explain. Many DSCR loans come through non-bank and investor channels. On those files, the requirement usually comes from the loan terms and the investor’s own flood policy, not from the statute directly.
That cuts both ways. A lender is not locked into demanding coverage once the property is outside the SFHA. But it may still demand it for its own risk reasons.
Across our wholesale network, programs differ on this point. Some lenders accept a valid LOMA as grounds to drop flood coverage. Others keep the requirement based on their own policy. A few treat it case by case. Because we see many lenders’ guidelines side by side, the practical move is to ask which camp a program falls in before you choose it, not after you are under contract. The loan documents and program guidelines control.
Bank regulators describe the same discretion: a lender is generally not obligated to require mandatory flood coverage on a building outside a SFHA.
How Underwriting Treats a LOMA, Step by Step
Here is the sequence on a typical file.
1. Flood determination. The lender orders a standard flood zone determination. This is the document the underwriter relies on, not a casual map lookup.
2. Match the LOMA to the property. The underwriter checks that the letter covers your address, legal description, and structure.
3. Reconcile the two documents. The determination may still show an SFHA, because it reflects the map, and the LOMA amends the map. The lender reconciles them.
4. Apply the lender’s flood policy. This is the deciding step. The program either accepts the LOMA as a waiver or keeps the coverage requirement.
5. Set the payment. If coverage is required, the premium goes into PITIA. If waived, it comes out.
6. Run the ratio. Rent is divided by the final PITIA. The result is your coverage number.
Keep in mind what the ratio does and does not measure. DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow, because repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
LOMA in Hand, Pending, or Not Started
Your next move depends on where the LOMA stands.
| Situation | What to do | What lenders expect |
|---|---|---|
| LOMA in hand | Deliver the letter and Elevation Certificate | Reconcile and apply flood policy |
| LOMA pending | Assume coverage at closing | Policy bound by the closing date |
| No LOMA yet | Price the deal with flood coverage | Standard flood requirement |
In hand. Ask the seller for an existing LOMA or Elevation Certificate early. The LOMA case number can be noted on the Elevation Certificate. A letter issued to a prior owner attaches to the property and structure, but confirm the lender will accept it for a new owner or an LLC borrower, subject to lender program eligibility.
Pending. Plan for coverage at closing. The Farm Credit Administration’s flood Q&A says a lender uses the loan closing date as the deadline for coverage on a designated loan. FEMA publishes no processing time, so do not build a contract around a guess. Many investors bind coverage, then cancel once the letter and lender waiver arrive.
Not started. Run the deal with the premium in the payment. If the LOMA comes later, treat it as upside, not as the thesis.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
The Document Package
Underwriters want clean paper. A solid package usually includes:
- The LOMA itself, showing the case number and any stated conditions.
- The Elevation Certificate behind it.
- The lender’s flood determination.
- Proof the address and legal description match across all documents.
- A current insurance quote or binder if coverage is still required.
- For detached structures or multiple buildings, confirmation of which structures the letter covers.
Conditions stated in the letter matter. A structure-specific letter does not clear a second building on the same parcel. A mismatch in address or legal description is among the most common reasons a waiver stalls.
How a LOMA Changes the DSCR
The premium is a payment line, so removing it lifts the ratio. Run the numbers in ratio terms. Say you model a duplex purchase at 75% LTV on an investment property, with rent covering the payment with flood coverage included at roughly 1.05x. Drop the flood line after a lender-accepted LOMA, and the same rent moves the ratio up, perhaps into the 1.10x range. Keep a voluntary, lower-cost policy, and you land between the two. These are modeled illustrations, not market data, and the actual lift depends on the premium and the rest of the payment. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Why does that matter? Strong coverage opens better pricing and leverage tiers. Across the network, 1.00 is where select programs start, and stronger ratios earn better terms. A separate select-lender path accepts coverage below 1.00, with leverage and terms adjusted. An LOMA that moves you from borderline to comfortable can change which path you are on.
A larger down payment can also lift the ratio by shrinking the payment. It never erases leverage caps, credit floors, reserve rules, or property eligibility. Purchases on investment properties typically run 75% to 80% LTV on most files. Credit floors start at 620 in parts of the network, with most programs wanting around 660 and 700 or higher for the strongest leverage. Reserves typically run about 6 months of PITIA, stepping up to about 9 months on loans above $1,500,000. All of this is subject to lender guidelines.
Escrows, Voluntary Coverage, and Cancelling
If a lender escrows insurance, the flood premium usually rides with the other escrowed items while coverage is required. Whether the escrow changes after a waiver is a program question, so ask.
To cancel an existing policy, FEMA’s instructions say to send the LOMA and the lender’s waiver to the insurance agent along with a cancellation form. No waiver, no cancellation. Do not drop coverage on your own and risk a lapse.
Where the General Rule Breaks
Fill. If the building sits on fill, an LOMA is not the tool. You need an LOMR-F, which also requires a community finding.
Remapping. An LOMA applies to the current map. A later map revision can pull a property back into an SFHA, and a loan on a newly mapped property becomes a designated loan when the map change takes effect. That timing comes from a proposed-rule notice, so treat it as a caution rather than a precise rule.
Lender overlays. A lender can keep requiring coverage outside the SFHA under its own risk policy.
Detached structures and condos. The interagency Q&A handles detached-structure exemptions and condominium coverage as separate questions from the LOMA question. Multi-unit and condo files often add master-policy questions.
Ineligible property types. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs, whatever their flood status.
Should You Keep Flood Insurance Anyway?
Often, yes. An LOMA does not mean there is no flood risk, and FEMA recommends considering coverage even where it is not required. An investor holding for years carries uninsured loss risk on a rental that cannot pay its own bills after a flood.
The decision is a tradeoff. Dropping coverage lifts the ratio and cuts carrying cost. Keeping it protects the asset, and premiums outside the SFHA tend to be lower. This one’s a genuine toss-up on some files. If the ratio only clears with the premium removed, that is a signal the deal is thinner than it looks. Tax treatment varies; consult a qualified professional.
Should You Pursue a LOMA at All?
Weigh three things: the cost of the survey, the wait with no published timeline, and your hold period. A long hold with a thin ratio favors pursuing it. A short flip does not. Ask first whether your target program accepts an LOMA as a waiver, because a letter the lender ignores is money spent for nothing.
Questions to Ask Your Lender
- Does this program accept a LOMA as grounds to waive flood insurance?
- Must coverage stay in place until the letter and waiver are in the file?
- Will the escrow change after a waiver?
- How does the lender reconcile the flood determination with the letter?
- Does it monitor flood zone changes for the life of the loan?
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire’s complete DSCR loans guide covers the full qualification picture. For the narrower question, see Lendmire’s piece Can an LOMA Remove the Flood Insurance Requirement on a DSCR Loan?.
Frequently Asked Questions
Do DSCR lenders require flood insurance on a property in a flood zone?
Usually, yes. The federal statute binds regulated lenders, and many DSCR lenders are non-bank. Those lenders typically write the requirement into their loan terms and investor policy, so confirm with the specific program.
Does an LOMA automatically cancel my flood policy?
No. It removes the federal mandate only. You need the lender’s waiver, then you send both documents to your insurance agent with a cancellation form.
Can I close if my LOMA is still pending?
Plan to bind flood coverage at closing. The closing date is the deadline for coverage on a designated loan, and FEMA publishes no processing time. Cancellation can follow once the letter and waiver arrive.
Does flood insurance count in the DSCR calculation?
Yes. The premium is part of the insurance line in PITIA, so it lowers the ratio when it stays in the payment.
Is an LOMA the same as an LOMR-F?
No. An LOMA is for natural ground. An LOMR-F is for property raised by fill and needs a community finding as well.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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References
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR Insurance Claim Requirements for a Storm-Hit Airbnb Rental · DSCR Seller-Carry Second Requirements for a Purchase · DSCR Loan Requirements for Agents and Loan Officers Buying Rentals
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.