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HUD Issues Proposed Rule on Floodplain Management

The U.S. Department of Housing & Urban Development (HUD) has issued a Proposed Rule that would revise HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS).

HUD issued its proposal as a means to improve the resilience of HUD-assisted or financed projects to the effects of climate change and natural disasters, and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances.

Climate-related disasters impact millions of Americans annually when roads wash out, power goes down, homes and businesses burn, crops fail, and schools flood. In 2021, the nation faced 20 extreme weather-related and climate-related disaster events with losses exceeding $1 billion each—a cumulative price tag of more than $145 billion.

The FFRMS was established to encourage federal agencies to consider and manage current and future flood risks. The Standard was revoked but then reinstated through Executive Order 14030, Climate-Related Financial Risk, clarifying that the FFRMS, as well as the guidelines for floodplain management under Executive Order 11988 should remain in effect. FFRMS requires agencies to prepare for and protect federally funded buildings and projects from flood risks. It requires agencies to determine specific federal building or project dimensions in order to manage and mitigate any current or potential flood risks.

HUD’s Proposed Rule would also revise the Department’s Minimum Property Standards for one- to four unit housing under HUD mortgage insurance, and under low-rent public housing programs to require that the lowest floor in both newly constructed and substantially improved structures located within the 1%-annual-chance (100-year) floodplain be built at least two feet above the base flood elevation as determined by best available information, and it would revise a categorical exclusion when HUD performs environmental reviews, and update various HUD environmental regulations to permit online posting of public notices.

Until the mid-1980's, HUD maintained separate Minimum Property Standards for different types of structures. Since that time, the Department has accepted the model building codes, including more than 250 referenced standards, and local building codes, in lieu of separate and prescriptive HUD standards.

Public comments on the Proposed Rule must be submitted to HUD by May 23, 2023.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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