On February 21, 2025, the Federal Housing Administration (“FHA”) published FHA Info 2025-10 to announce a temporary partial regulatory waiver, and related Single Family Housing Policy Handbook 4000.1 waiver to its minimum property standards (“MPS”) requirements regarding drainage and flood hazard.
The FHA previously published Mortgagee Letter (ML) 2024-20, Adoption of Federal Flood Risk Management Standard (FFRMS) for Minimum Property Standards in Special Flood Hazard Areas (SFHA) in November 2024, to implement the HUD final rule, Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure, as previously discussed here.
ML 2024-20 established that newly constructed residential properties located in 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, effective January 1, 2025. The waivers announced in FHA Info 2025-10 temporarily remove the requirement that new residential construction be built at least two feet above the BFE. All other requirements established by the final rule remain in place.
In the announcement, FHA states that “Without this partial waiver, the new MPS (minimum property standards) required elevation standard would have limited the land available for development and increased the cost of construction for FHA-insured single-family properties, thereby contributing to the insufficient supply of new construction housing and rising home prices.”
The partial waiver will be in effect until February 19, 2026.
