Yes. Flood insurance is part of the monthly housing expense lenders count. Fannie Mae lists property, flood and mortgage insurance premiums, real estate taxes and special assessments in the housing expense. When flood coverage is required, its premium raises your payment and your debt to income ratio.
Fannie Mae defines the monthly housing expense for the subject property as principal and interest, property, flood and mortgage insurance premiums as applicable, real estate taxes, special assessments, association dues and any other proposed housing expense.
The qualifying payment feeds your DTI. If flood insurance is required on your property, its premium is a real part of that payment, whether it is paid through escrow or directly.
The practical lesson is to get the flood determination and a quote early. A property in a mapped flood zone can carry a premium that changes the price you can afford, and a quote can change after the insurer reviews the property.
Example: how a flood premium moves the housing payment
| Item | Without flood | With flood |
|---|---|---|
| Principal and interest | $2,000 | $2,000 |
| Taxes | $450 | $450 |
| Homeowners insurance | $250 | $250 |
| Flood insurance | $0 | $180 |
| Association dues | $100 | $100 |
| Total housing payment | $2,800 | $2,980 |
| Share of $9,000 income | About 31.1% | About 33.1% |
Made up figures. The share shown is the housing payment only, not total DTI.
What to do
- Check the property's flood zone before you make an offer.
- Get a flood insurance quote along with the homeowners quote.
- Give both quotes to your lender so the payment uses real numbers.
- Ask whether the premium will be escrowed.
General information, not legal or tax advice. Confirm with your title company or attorney.
Sources
- Fannie Mae Selling Guide, B3-6-03, Monthly Housing Expense for the Subject Property. Housing expense includes flood and other insurance premiums, taxes and special assessments. Source type: Official. Checked October 17, 2026.
- Fannie Mae Selling Guide, Chapter B7-3, Property and Flood Insurance. Flood insurance requirements topic. Source type: Official. Checked October 17, 2026.