Climate Risks Impact Home Financing

As climate events grow more frequent and severe, the real estate and mortgage industries are adapting quickly. From hurricanes to wildfires and floods, these risks don’t just impact homeowners—they’re changing how lenders, insurers, and investors view properties across the country.

Why It Matters for Homebuyers

Climate-related risks can affect your ability to get financing, the cost of homeowners insurance, and the long-term value of your investment. For example, if you’re purchasing a home in a flood zone or wildfire-prone area, you may face:

• Higher insurance premiums or mandatory coverage requirements
• Stricter appraisal standards
• Delays or challenges in underwriting and loan approval

What Lenders Are Watching

Lenders are increasingly using climate risk assessments and FEMA flood maps when underwriting loans. This doesn’t mean you can’t buy in at-risk areas—it just means you’ll need to be more informed and prepared.

Tips to Protect Your Investment

• Research climate risks: Use tools like ClimateCheck or FEMA.gov to check your future home’s exposure.
• Work with local experts: Lenders and realtors familiar with your area can guide you through the right steps.
• Understand insurance requirements: Make sure you’re not underinsured—and know what’s excluded from standard policies.

Buying a home is one of the biggest financial decisions you’ll ever make. Factoring in climate risks ensures your investment stays secure for years to come.