FHA Proposes New Flood Risk Management Standards for New Construction

On September 23, 2024, FHA announced a Draft Mortgagee Letter proposing the adoption of Federal Flood Risk Management Standards for new construction in Special Flood Hazard Areas (SFHAs) applying to all FHA Title II Single Family forward and Home Equity Conversion Mortgage Programs.

Among other matters, the proposed new guidelines would require newly constructed housing or units in condominium projects to be built at least two feet above the base flood elevation if any portion of the dwelling and related structures or equipment essential to the property’s value is located in an SFHA.  The new standards would affect newly constructed homes with building permits submitted after January 1, 2025. 

Stakeholders are invited to provide input on the proposed Mortgagee Letter through October 7, 2024.