I am looking for clarification regarding the exemption and term “used as a residence”. In paragraph (3) I see that serve as a residence is defined, but how do we interpret that? Is it saying if there is a bathroom, kitchen, or sleeping space, the detached building serves as a residence? Or is it saying the bank can determine for itself? The building in question is a cabana/pool house detached from the residence with a kitchen and a bathroom, with a roof and 4 walls. It appears that generally a pool house would be used while using the pool, but could someone live there, I would say yes.

I realize a bank can choose to require flood insurance on a cabana/pool house, but I am trying to determine the flood law requirements to assist in advising management.

(3) ‘‘Serve as a residence’’ shall be based upon the good faith determination of the FDIC-supervised institution that the structure is intended for use or actually used as a residence, which generally includes sleeping, bathroom, or kitchen facilities.

"detached from the residence with a kitchen and a bathroom"

If it does not include sleeping quarters, I would have a hard time saying that its intended use was a residence.

the regulations do not state "and". it states sleeping, bathroom or kitchen facilities.

(3) ‘‘Serve as a residence’’ shall be based upon the good faith determination of the FDIC-supervised institution that the structure is intended for use or actually used as a residence, which generally includes sleeping, bathroom, or kitchen facilities.

Based on the property's description my determination would be it is not intended to be used a residence.

When it comes to the detached structure exemption I don't think you can have a cookie cutter blanket statement within the policy for what would or would not be a "residence". I think the determination will have to be based on the known information at hand.

If this pool house had a bed set-up in it and someone was actually living in it at the time then I don't think you would have a basis for exempting it because it is being used as a residence.