Biden administration issues final flood rule for federal-backed housing
HUD Sets New Flood-Related Requirements
bivey@imfpubs.com
The Department of Housing and Urban Development issued a final rule Monday aimed at protecting borrowers and the federal government from flood risk. The final rule includes changes to the Federal Flood Risk Management Standard that applies to HUD-financed properties, including some single-family FHA mortgages.
For example, the rule includes a new elevation standard for new-construction single-family properties that will receive an FHA mortgage. In certain flood zones, the property must be at least two feet above the base flood elevation. The previous standard allowed the property to be at the base flood elevation.
The Mortgage Bankers Association raised concerns about the new requirements.
“While MBA appreciates the eight-month implementation timeline, we remain deeply concerned that expanding floodplain areas, implementing new elevation requirements for some new single-family and multifamily homes, and requiring higher levels of flood insurance will make FHA financing more expensive and less competitive,” said Bob Broeksmit, president and CEO of the MBA.
Biden administration issues final flood rule for federal-backed housing
BY: ZACK COLMAN | 04/22/2024 11:56 AM EDT
The Biden administration issued a final flood protection rule Monday that will bring sweeping changes in the construction and siting of federally backed housing.
The Department of Housing and Urban Development's federal flood risk management standard, which it published Monday in the Federal Register, will expand the areas designated as flood plains, which will apply rules for elevating new multifamily homes and substantially rebuilt multifamily residences, while also raising the minimum height for those structures. It also updated Federal Housing Authority minimum standards for elevation for new construction backed by a HUD-insured single-family home loan.
Climate change has driven sea-level rise, helped make hurricanes more powerful and worsened torrential rainfall events that have all exacerbated flooding, which causes more property damage than any other natural disaster.
The HUD rule aims to limit property damage from flooding by imposing stricter requirements on new HUD-backed multifamily construction and for using federal dollars to substantially rehabilitate HUD properties in the special flood hazard area. Those areas are often referred to as the 100-year floodplain, which means they have a 1 percent chance of flooding any year over a 30-year horizon.
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