Communities Should Consider Adopting a 2-Foot Freeboard Now!
On April 23, 2024, HUD adopted a final rule to implement the Federal Flood Risk Management Standard (FFRMS). For new construction of one- to four-unit residential properties located in a Special Flood Hazard Area (SFHA) and insured under FHA Single Family mortgage insurance programs, the rule revises HUD’s Minimum Property Standards (MPS) to require that the lowest floor 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. 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. Compliance with this part of the rule is required for new construction with building permit applications submitted on or after January 1, 2025.
Why does this matter?
According to March 2024 data from the Mortgage Bankers Association, over 26% of all mortgage applications nationally for newly constructed homes were for FHA insured mortgages. That is more than one in four! HUD estimates approximately 10% of new Federal Housing Administration (FHA) single-family homes constructed each year are within the 100-year floodplain. If a community does not have a 2-foot freeboard adopted in its floodplain regulations, it risks cutting off a significant number of homebuyers from newly constructed homes located in Special Flood Hazard Areas and creates another barrier to home ownership. In today’s housing market, where affordable options are already in short supply, FHA mortgages are vital to first-time buyers and moderate-income families.
What should a community do now?
HUD has taken a critical step in addressing flood risk for new construction by adopting this new standard. Now it’s time for local communities to follow suit by adopting a minimum of 2-foot freeboard regulations, if they don’t already have this standard. Adopting a 2-foot freeboard in local floodplain management regulations typically is a relatively straightforward amendment. First, reach out to your state floodplain management office to see if the state has model ordinance language (contact information for your State NFIP Coordinator is available here). Review the state’s model language and prepare a draft amendment for your community.
Your state NFIP coordinator may also help you with educational information for your local meetings. After draft ordinance language has been written, most states require submitting the draft to the state floodplain management office for review and comment. Next, adopt the amendment using your standard adoption process. Finally, submit the adopted regulations to your state floodplain management office.
If a community wishes to conduct a more comprehensive review of its local standards, ASFPM has developed several excellent resources with suggestion of higher standards for increased community flood resilience including ASFPM’s higher standards guide, subdivision design guidelines in flood hazard areas, and taking a No Adverse Impact (NAI) approach to higher regulatory standards.
At ASFPM, we strongly support HUD’s efforts to improve flood resilience, and we remain committed to working with them throughout the implementation process. To help you navigate these changes, we’ve developed an FAQ to clarify how the rule impacts your community and what you can do to ensure compliance.
