A new US Department of Housing and Urban Development (HUD) amendment that affects the agency’s implementation of the Federal Flood Risk Management Standard (FFRMS) went into effect January 1, 2025. Part of the amendment will impact prospective first-time homebuyers seeking Federal Housing Administration (FHA) loans and mortgage insurance.
What is the Federal Flood Risk Management Standard (FFRMS)?
FFRMS, which was created in 2015 by executive order, requires federal agencies to protect federally funded structures from increased flood risks by mandating vertical and horizontal floodplain expansions that are more stringent than had been previously required. FFRMS applies to projects that use federal dollars for new construction, substantial improvements, or substantial repairs to structures and facilities. In 2024, federal agencies such as the Federal Emergency Management Agency (FEMA) and HUD issued final rule and policy guidance to implement the FFRMS. These policies became effective in late 2024 and early 2025.
For specific locations, the FFRMS requirements are established using one of three approaches:
- Climate-informed science approach (CISA)
- 0.2% annual chance approach (0.2PFA)
- Freeboard value approach (FVA)
The CISA approach for establishing the FFRMS requirements is preferred, but CISA information is not currently available in most areas.
The 0.2PFA approach uses the existing regulatory 500-year floodplain to establish the FFRMS flood protection elevation and floodplain extent.
The FVA approach uses a specified freeboard of 2 or 3 feet above a site’s Base Flood Elevation (BFE), with the floodplain width extended horizontally to match the corresponding elevation. Freeboard is a floodplain management concept typically expressed in feet above a flood level that helps protect structures from floods by elevating them above the BFE.
Where both the 0.2PFA and FVA approaches are applicable, the higher elevation value should be used. The Federal Flood Standard Support Tool provides guidance for determining which approach to use and if FFRMS applies to a project. For areas without available FEMA floodplain mapping, “best available information” should be used. This can include state or local flood hazard information, historic flooding records, aerial photos, topographic maps, soil maps, or a contracted flood hazard study completed by a professional engineer.
HUD’s New Freeboard Requirement
Among the most notable changes in HUD’s implementation of FFRMS is in the agency’s Part 200 Minimum Property Standards, which now require the lowest floor (including basements, garages, and enclosed storage areas) of newly constructed one- to four-unit family housing within the floodplain to be built with at least 2 feet of freeboard above an area’s BFE. There was previously no freeboard requirement.
By adding the 2-foot freeboard requirement to Part 200 Minimum Property Standards, HUD is applying a pared-down version of the FFRMS (consideration of the horizontally expanded floodplain is not required) to newly constructed single-family properties when prospective buyers of these properties seek FHA loans and mortgage insurance.
This is a significant change from HUD’s past requirements, which didn’t affect such homebuyers. The change could impact thousands of people; more than 793,000 homebuyers and homeowners accessed FHA mortgage insurance in the 2024 fiscal year, and about 82.6% of these mortgages were for first-time homebuyers, according to HUD’s 2024 report on FHA’s mutual mortgage insurance fund.
Impact on Communities
HUD Part 200 Minimum Property Standards are not a FEMA National Flood Insurance Program regulatory requirement, but this change will have a substantial impact on community floodplain regulations moving forward.
Communities that have not adopted a 2-foot freeboard requirement in their floodplain regulations risk creating barriers to home ownership by reducing access to FHA-backed mortgages. A lack of alignment between community floodplain regulations and HUD standards would have an outsized impact on first-time homebuyers and low-income residents who use FHA programs. The Association of State Floodplain Managers recommends communities consider adopting a 2-foot freeboard requirement now.
Curious About How These Regulations May Impact You? Trihydro Can Help.
Flood hazard regulations and requirements are complex and often vary between the federal, state, and community levels. Trihydro’s certified floodplain managers strive to stay informed by regularly monitoring updates and changes to flood hazard regulations and requirements. If you have flood hazard questions, concerns, or challenges, drop your information into our contact form, and we’ll schedule time to discuss how you can prepare for and manage changing regulations and requirements.
