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FHA Issues New Flood Risk Management Standards for New Construction

FHA Issues New Flood Risk Management Standards for New Construction

Under the guidelines published in Mortgagee Letter 2024-20, all newly constructed dwellings located within the 1-percent-annual-chance (100-year) floodplain must be built at least two feet above the base flood elevation as determined by FEMA.

  • This elevation standard would be applicable to FHA-insured mortgages on homes that are new construction or have a building permit application submission, or equivalent, dated on or after January 1, 2025.

Why it matters: HUD estimates that elevating new construction dwellings in flood-prone areas will help reduce property damage; avoid relocation, or temporary housing expenses or lost income due to flooding; and potentially, lower flood insurance premiums.

What’s next: The provisions of ML 24-20 are effective immediately and apply to all FHA single-family “forward” mortgages and HECMs.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.