When a commercial real estate deal closes, flood risk due diligence typically begins and ends with the FEMA flood map. That one document, often decades out of date and built around riverine flooding, may also get attached to an ESA Phase 1 environmental report and a Property Condition Assessment (PCA), handed to the lender, and filed away.

The challenge, according to Albert Slap, founder of RiskFootprint™, is that FEMA flood maps were designed around specific types of flood risk, riverine and coastal flooding, and were never intended to capture the full picture of how water reaches and damages buildings. “FEMA flood maps don’t include heavy rainfall flooding,” Slap says. “They’re mostly dealing with riverine-type flood risk.”

That distinction matters enormously for all properties because, as is widely known, wherever it rains, it can flood.

According to Mr. Slap: “Hurricane Harvey in 2017 flooded approximately 150,000 Houston-area homes, 70% of which were located in FEMA’s X Zone, designated lower risk for flooding. This extreme, non-riverine rainfall event overwhelmed drainage systems and caused widespread flooding in FEMA X zones, where most property owners did not carry NFIP flood insurance. The result was massive uninsured economic loss, disproportionately affecting households and businesses that believed they were in ‘low-risk’ areas. Harvey caused an estimated $125 billion in total damages.”

Real property buyers (borrowers) and lenders face the same problem at a larger scale. A credit officer reviewing a commercial or residential loan may be working from a FEMA map that predates recent storm events, excludes rainfall-driven inundation entirely, and does not include NOAA storm surge modeling, which has advanced considerably in the last decade.

In order to provide a more realistic picture of real property flood risks, RiskFootprint™ integrates flood models and maps from Fathom/Swiss Re, used by global insurers and reinsurers, to expand on what FEMA provides. Fathom/Swiss Re adds pluvial, or rainfall-driven, flood modeling alongside riverine and coastal surge scenarios, giving lenders and buyers a more complete picture of property-level flood exposures before a deal closes.

Exposure to flooding is an important piece of information about a property. But at the deal level, stakeholders also need to know if the building being purchased and mortgaged is actually vulnerable to the flood inundation predicted. In order to move from mere exposure to actual vulnerability, RiskFootprint™ now includes estimated first-floor elevation data from True Flood Risk’s AI tool.

Using Google Street View and other imagery, AI and machine learning, True Flood Risk provides RiskFootprint™ with the estimated first-floor height on more than 300 million U.S. buildings. That allows the platform to move from flood exposure to actual flood vulnerability, the difference between a building that sits two feet above a flood line and one that sits six inches below it.

FEMA maps serve an important function, and their flood data remains a valuable baseline used in NFIP insurance and building codes at the local level. Where RiskFootprint™ adds to that foundation is in rainfall-driven inundation, the mechanism behind events like Harvey, alongside storm surge and coastal scenarios. A consultant relying solely on a FEMA map as the complete flood picture for a property is working with only one important piece of a larger puzzle.

To both assist stakeholders with understanding flood risks and to protect consultants from future E&O claims, the better approach, Slap argues, is to conduct a full-spectrum flood assessment before a deal closes, one that accounts for all the ways water reaches a building, not just the scenarios FEMA mapped decades ago. RiskFootprint™ risk assessment reports are available at the deal level for a few hundred dollars per property, making comprehensive flood due diligence accessible on virtually any transaction, residential or commercial.

About RiskFootprint™: RiskFootprint™ is a property resilience assessment platform that provides science-driven hazard analysis across 34+ natural hazard categories for commercial and residential clients. Built to align with ASTM Property Resilience Assessment (PRA) methodologies, it helps building owners, purchasers, lenders, and due diligence professionals identify and evaluate risk at the deal level. Learn more at riskfootprint.com.

Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.

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