Is an NHD Report Required for a Refinance in California?

Civil Code §1103 applies to transfers

The NHD statute applies to "transfers" of real property. A refinance is a new loan secured by the same property — ownership doesn't change hands. Since there is no transfer, §1103 does not require an NHD report for a standard refinance.

When lenders require flood zone verification

While no NHD is legally required, mortgage lenders independently determine whether a property is in a Special Flood Hazard Area (SFHA). If it is, federal law requires the borrower to carry flood insurance. This is a lender requirement, not a §1103 disclosure — it's a different process and a different document.

For a complete overview of the statutory zones and how flood zones fit in, see our guide to the six California natural hazard zones.

When a refinance DOES trigger an NHD

Some transactions that look like refinances actually involve a transfer. Adding or removing an owner from title, transferring to a trust (in some cases), or a cash-out refinance structured as a sale-leaseback can all trigger §1103. If title changes hands, an NHD is required.

• Adding or removing an owner. Any recorded deed change that alters ownership is a transfer.
• Transfer into a trust. Some trust transfers are exempt, but many require the same disclosure as a sale.
• Sale-leaseback structures. If ownership transfers to the lender or a third party, §1103 applies.

What about reverse mortgages?

A reverse mortgage is a loan against existing equity — no transfer occurs. No NHD is required. However, the lender will still verify flood zone status independently.

Bottom line

Standard refinances do not require an NHD report. If you're unsure whether your transaction involves a transfer, consult your escrow officer or title company. For actual property sales, order your NHD report early in the process.