The Department of Housing and Urban Development (HUD) published a Federal Flood Risk Management Standard (FFRMS) final rule in the Federal Register on April 23 to help communities prepare for and reduce flood damage. The rule impacts certain single family and FHA-insured or HUD-assisted multifamily properties, including capital advances under HUD’s Section 202 Supportive Housing for the Elderly program.

According to HUD, flooding is the most common and costly weather-related disaster in the United States, and underserved communities are disproportionately impacted by flooding events. Research from real estate company Redfin found that formerly redlined neighborhoods face a 25% greater risk of flooding than non-redlined neighborhoods.

“In updating flood risk standards, HUD is providing communities the flexibility to calculate their true risk. People of modest means are more likely to live in a flood-prone place and have a longer time recovering when disaster strikes,” said Marion McFadden, Principal Deputy Assistant Secretary for Community Planning and Development.

HUD’s press release states that the rule strengthens standards by increasing elevations and flood proofing requirements of properties in areas at risk of flooding, where federal funds are used to develop or provide financing for new construction within the now defined FFRMS floodplain. The rule establishes a three-tiered approach to define the FFRMS floodplain, depending on the data available in the project area.

The FFRMS expands the vertical and horizontal floodplain boundaries beyond the special flood hazard area (100-year floodplains). “This final rule provides for a more forward-looking approach to floodplain management, which bases decisions not just on past flooding but on how flood risk is anticipated to grow and change over the anticipated life of a project,” states the final rule.

Parts of the rule also apply to substantial improvement to structures financed through HUD grants, subsidy programs, and applicable multifamily programs, but the update to Minimum Property Standards only applies to FHA-insured new construction within the 100-year floodplain.

For HUD-assisted and HUD-insured rental properties, leases will be required to include resident acknowledgements indicating that they have been advised that the property is in a floodplain and flood insurance is available for personal belongings.

Compliance with the procedures for the FFRMS floodplain management and protection of wetlands is required for FHA-insured and HUD-assisted Multifamily properties, including Multifamily FHA, Section 202 capital advances, RAD conversions to Project-Based Rental Assistance (PBRA), the Green and Resilient Retrofit Program (GRRP), FHA Risk Share, and Section 8 renewals with capital repairs, no later than January 1, 2025.