Passive Federal Protection
Restrictions on the availability of Federal money for loans or Federal flood coverage in these protected areas do not preclude the use of "free market" loans or open market flood insurance. Further, these laws do not disallow building and development in these areas; they just don't allow the use of Federal dollars to finance, insure, build roads to or supply potable water to such development.
Owners are allowed to develop their property as they desire (subject to building codes and laws) but without any federal money. The government did not take away property rights, just the availability of Federal funds, thus the term "Passive Federal Protection."
Determination of Coverage Eligibility
Only the US Fish and Wildlife Service can officially determine if a property is located in a CBRS unit or an OPA. Although these zones are indicated on applicable Flood Insurance Rate Maps (FIRMs), boundary lines on older FIRMs are only approximations and can be off by as much as 100 yards (affecting as many as three houses). No local surveyor, building inspector or other town official has the authority to make an official determination.
Standard flood insurance policies require that if ANY part of a structure is in a Special Flood Hazard Area (SFHA), the entire building must be rated in the higher risk zone as per the prior discussion. This rule does not necessarily apply in CBRS units or OPA's. If a building is dissected by a CBRS or OPA boundary line, provisions in the law may allow the property to remain eligible for Federal flood coverage. Decisions are made on a case-by-case basis depending on the specific details and history of the property in question.