I've done a lot of research on this because of the impact of the Biggert-Waters Act next month. First, flood insurance is handled through various insurance companies but is all (mostly) under the National Flood Insurance Program (NFIP). FEMA manages NFIP. The maximum coverage is $250K for the residence and $100K for contents. As with most insurance, you can raise your deductible to lower your premium. New policies in flood zones will all require an Elevation Certificate (EC) by a surveyor to determine your BFE and level of your home (explained later). The Flood Insurance Rate Map (FIRM) determines if you are in a flood zone and the amount of risk. The FIRM maps are always being re-drawn, so you might be out of a flood zone one year and in the next. The result after FIRM is that building codes change to reflect the zones, so in "new" flood zones we have older, pre-FIRM homes built lower than newer post-FIRM homes. As you've figured out, you do not have to be anywhere near the water to be in a flood zone, and you can be right on the water and not be in one. (Really - a good friend has a waterfront home on Tampa Bay but is X, although his pool is VE). The amount you will pay is based on two main things - Base Flood Elevation (BFE) which is how high someone has determined your spot will flood. Mine is 11 feet. The variable is how high the top of your bottom floor is. Example: My house is a one-story pre-FIRM slab, so my tile floor is the top of the bottom floor at 8 feet. The raised, post-FIRM houses are only garages and rec rooms on ground level (no liveable space), and their "top of bottom floor" is at least 8' up. My "minus 3" from my EC is what determines my rate. Obviously, a "zero" or better (+) is going to have the lowest rate. The biggest question is where the BFE comes from. My neighbors are all upset because it has never flooded here in 40 years since it was built, even a little bit, through many, many tropical storms. Remember that is what most of the Sandy victims said, too, only many of them were there even longer. Also, keep in mind that 30% of claims every year are NOT in designated flood zones. I seriously doubt that all the homes being inundated in Colorado right now are in flood zones. I won't get into the impact that the Biggert-Waters Act will have on many homes unless someone asks, but the bottom line is that it's going to affect many of the communities that are still recovering from the BP Oil Spill and the recession in general. People just started going back to the gulf beaches this past summer and now all those businesses that were built before the FIRM maps were in place are going to get hit with a big insurance bill that could put them under and will stall our recovery. Hope this helps you understand a bit about flood insurance. It can be pretty scary, but it's managable for the most part.

IMO, chances are that the water is the result of a high water table...which if so, will be an ongoing problem...especially when you consider that problems such as this only get worse as more building occurs. Best bet is to find out the source for certain...then decide. If for some reason this is a non-issue for you, the ONLY way to determine the presence of mold as well as the type of mold is to hire a reputable environmental firm that employs individuals with degrees in bio-sciences in order to have the best chance that the sampling process is conducted properly. Almost all HI's who claim that they test for mold have taken a quickie mold-is-gold 8 hour course...which does little if anything to train in proper air sampling and swabbing protocol.

It's more appropriate in comparison to the neighborhood he wants to build in. Average home age is 60 to 70 years old and average sq. footage is around 1400 sq. ft. Millworkman brought up a good point about the green new deal stuff. A new proposed bill would incentivize foresters to turn their tree stands ear marked for harvest into carbon storage banks and sell carbon credits to the evil carbon producers(everyone), instead of turning those trees into lumber to build houses. Be prepared to live in concrete boxes built by 3d printers which will cost America millions of jobs, but I hate to admit it and pains me to say this, but I kind of like the idea. It's coming and can't be stopped so prepare for the future comrades. I've always liked trees so can someone be an conservative bible thumping gun toting environmentalist?

I am not a normally "I would walk" kind-of person. I accept that buying a house means some things will not be perfect, especially with new construction. There are thousands of things that can go wrong in a new build, and sometimes crap happens. However, I agree with David Cary here. For me, that kind of catastrophic event would likely mean I'd walk away. There are so many caveats to that too though, that only you can answer. Will you lose any money you put down? Do you have other acceptable housing options? Are prices rising or falling in your area? In my area of the east coast prices are still rising. So a signed contract from a year ago, let's say, will be cheaper than signing a new one today. But if prices are falling in your area and you can get out of this contract without penalty, that could be your silver lining. Too many variables for me to give you a solid answer. But I'd be inclined to walk.