On November 7, 2024, the Federal Housing Administration (“FHA”) posted Mortgagee Letter (ML) 2024-20, Adoption of Federal Flood Risk Management Standard (FFRMS) for Minimum Property Standards in Special Flood Hazard Areas (SFHA). The final guidance provides updates to FHA’s minimum property standards for newly constructed single-family residential homes financed through the FHA Single-Family program, with the exclusion of manufactured housing.
ML 2024-20 implements the Final Rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, published in April 2024 by the Department of Housing and Urban Development (“HUD”), Office of Environment and Energy.
ML 2024-20 amends FHA’s minimum property standards under 24 C.F.R. § 200.926d(c)(4), Drainage and flood hazard exposure, by requiring that newly constructed residential dwellings located within the 1-percent-annual-chance (100-year) floodplain must have the lowest floor of the property be built at least two feet above the Base Flood Elevation (“BFE”) level determined by the Federal Emergency Management Agency. Previously, the requirement for a newly constructed residential dwelling was that the lowest floor (including any basement) be built at or above the 100-year floodplain elevation in compliance with the National Flood Insurance Program.
The new elevation standard of two feet above the BFE level is applicable to FHA-insured mortgages on homes with a building permit application submission date of January 1, 2025, or later. By elevating newly constructed homes in flood zones, FHA expects to see a decrease in flood damage. Homeowners are also expected to realize savings through lower insurance premiums and avoidance of relocation or temporary housing expenses.
The updates published in ML 2024-20 will be incorporated into an upcoming version of the Single Family Housing Policy Handbook 4000.1. HUD has also posted a FFRMS Final Rule Webinar Series and an FFRMS FAQs page with additional information.
