[LIforrelaxin]

Big Dog,

As other have said if the Bank deems you to be in the flood plain and you are not able to prove to them that it is not a concern then you are going to have to get the flood insurance.

Now not knowing how your P&S is set up there are two things:
-- you should have a clause about securing a mortgage, and if you can't secure it then that will let you out of the P&S.. When I bought a condo a year ago, my P&S had a clause that let me get the security deposit and everything back if I couldn't secure my mortgage. I almost had to enact this when I couldn't get specific needed documents from the Condo Association. As long as you prove it is either because of something that wasn't disclosed to you, as seems the case her, or through no fault of you own
.
-- if you really want the place, I would ask for an extension. In this market I would think the current owners would be willing to give you more time, as long as they know your serious and about the problem you are trying to deal with.