Flash Flood Guidance consists of indices that estimate the amount of rain of a certain duration that is needed over a given small basin in order to cause minor flooding. Backwater catchment inundation from swollen rivers or regional groundwater inputs are not significant over the spatial and temporal scales for the majority of upland flash flood prone basins, as such, these effects are not considered. However, some lowland areas and flat terrain near large rivers experience standing water long after local precipitation has ceased. NASA is producing an experimental product from the MODIS that detects standing water. These observations were assimilated into the hydrologic model in order to more accurately represent soil moisture conditions within basins, from sources of water from outside of the basin. Based on the upper soil water content, relations are used to derive an error estimate for the modeled soil saturation fraction; whereby, the soil saturation fraction model state can be updated given the availability of satellite observed inundation. Model error estimates were used in a Monte Carlo ensemble forecast of soil water and flash flood potential. Numerical experiments with six months of data -December 2011 showed that MODIS inundation data, when assimilated to correct soil moisture estimates, increased the likelihood that bankfull flow would occur, over non-assimilated modeling, at catchment outlets for approximately 44% of basin-days during the study time period. While this is a much more realistic representation of conditions, no actual events occurred allowing for validation during the time period.