HUD Increases Wind and Named Storm Insurance Coverage Deductible Amount
April 18, 2024 — HUD’s Office of Multifamily Housing published a Mortgagee Letter & Housing Notice, revising the Federal Housing Administration (FHA) Multifamily property insurance requirements for wind and named storm coverage by increasing the maximum casualty insurance deductible amount for wind or named storm coverage to the greater of $50,000 or 5% of the insurable value per location, up to a maximum amount of $475,000 per occurrence, for new mortgage insurance transactions that have not achieved final endorsement.
For additional detail, see the press release here (opens in new window).
HUD Announces Final Rule that will Protect Communities from Flooding Events and Rising Insurance Costs
April 23, 2024 — The Department of Housing and Urban Development’s (HUD) Office of Environment and Energy (OEE) published the final rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, [Docket No. FR-6272-F-02] in the Federal Register.
This final rule revises HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS) in accordance with the Executive Order 13690 titled “Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input”.
For FHA Single Family mortgage insurance programs, the final rule revises HUD’s Minimum Property Standards (MPS) to require that, for one- to four-unit mortgaged properties that are new construction and located in a Special Flood Hazard Area (SFHA), the lowest floor of the new construction be at least two feet above base flood elevation (BFE). This requirement adds two feet of additional elevation to FHA’s existing MPS requirement as a resilience standard, though many jurisdictions already require homes in SFHAs to be elevated one or more feet above BFE. The requirement does not apply to the rehabilitation of existing structures with 203(k) insured financing, or the purchase of manufactured homes insured under FHA Single Family programs.
The final rule’s higher flood elevation standard in the MPS will apply to new construction where building permit applications are submitted on or after January 1, 2025.
FHA will publish a Mortgagee Letter (ML) that provides implementation guidance for the provisions in the final rule that impact its Single Family mortgage insurance programs.
Refer to the final rule for specific compliance dates.
HUD’s OEE will host webinars to provide additional information on the FFRMS and its implementation. Additional details will be provided in a future FHA INFO.
For more information, read the press release (opens in new window).