FHA Proposes Private Flood Insurance Option for Single Family Mortgages

HUD recently published a proposed rule to amend FHA regulations and allow a private flood insurance option instead of insurance through the National Flood Insurance Program (NFIP) for properties located in Special Flood Hazard Areas.  The proposed rule will be published in the Federal Register and FHA is soliciting comments during a 60-day comment period following publication.  As this is a proposal only, FHA’s current policies remain unchanged at this time, including the requirement that minimum flood insurance be obtained through the NFIP.