HUD Releases New Federal Flood Risk Management Standard

The Department of Housing and Urban Development (HUD) has published a final rule in the Federal Register that revises HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS). The regulation is effective May 23, 2024. However, compliance with new elevation requirements will be required for single-family new construction where building permit applications are submitted on or after Jan. 1, 2025, and compliance with the procedures for the FFRMS floodplain management and protection of wetlands is required for FHA-insured and HUD-assisted apartment properties no later than Jan. 1, 2025.

For FHA-insured or HUD-assisted multifamily properties, the new FFRMS requires a complicated, three-tiered process for determining the extent of the FFRMS floodplain, with a preference for a climate-informed science approach (CISA). The FFRMS expands the vertical and horizontal floodplain boundaries beyond the special flood hazard area (100-year floodplains). The rule requires more stringent elevation and flood proofing requirements of properties where federal funds are used to develop or provide financing for new construction within the now defined FFRMS floodplain. It also applies to substantial improvement to structures financed through HUD grants, subsidy programs and applicable multifamily programs.

Through changes to HUD’s Minimum Property Standards, the department will also require single-family homes located in a 100-year floodplain to be elevated 2 feet above base flood elevation to qualify for FHA mortgage insurance.

The final rule also includes expanded notification requirements. The required information for owners, buyers and developers includes:

• The requirement or option to obtain flood insurance,
• The approximate elevation of the FFRMS floodplain,
• Proximity of the site to flood-related infrastructure, including dams and levees,
• Ingress and egress or evacuation routes,
• Disclosure of information on flood insurance claims filed on the property, and
• Other relevant information, such as available emergency notification resources.

For HUD-assisted, HUD-acquired and HUD-insured rental properties, new and renewal leases are required to include acknowledgements signed by residents indicating that they have been advised that the property is in a floodplain and flood insurance is available for their personal property, among other information.

In addition, the final rule includes changes to the current eight-step decision-making process, among other amendments. For instance, HUD is removing an exception on conditional Letter of Map Amendments (LOMAs) and conditional Letter of Map Revisions (LOMRs) issued by the Federal Emergency Management Agency because the FFRMS is expanded beyond the 100-year floodplain. HUD is changing this policy to disincentivize the use of sitewide fill and require completion of the eight-step decision-making process before adding fill to modify a floodplain.

HUD is planning to host webinars to provide additional information on the FFRMS and its implementation.

View the final rule in the Federal Register.