FEMA Rolls Back BCA Rates for Mitigation Projects

The Benefit-Cost Analysis discount rate has been increased from 3.1% to 7% following recent action by the Office of Management and Budget (OMB). On April 8, 2025, OMB revoked a 2024 update to Circular No. A94, “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs,” to return the previous discount rate set in October 1992.

One of the goals of the A-94 circular was to make it easier to demonstrate a project’s cost-effectiveness so as to enable more communities — particularly those that are underserved — to access hazard mitigation and public assistance grants.

As the agency implements the updated discount rate, Hazard Mitigation Assistance projects that have not been awarded by FEMA as of April 8, 2025, must use the 7% discount rate when using a BCA to calculate cost effectiveness. This applies to all projects, including those that require re-review for additional federal funding or phased projects.

Public Assistance projects that have not been awarded by FEMA as of April 8, 2025, should use the 7%
discount rate when using a BCA to demonstrate cost effectiveness. Visit the Benefit Cost Analysis page for more information.