HUD Announces New Flood Standards

by Ben Weisburg and Michael Gross, NJBA Environmental Counsel and Patron Sponsor Giordano, Halleran & Ciesla

On April 23, 2024, the U.S. Department of Housing and Urban Development (HUD) enacted a final rule that revises HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS). For FHA-insured or HUD-assisted multifamily properties, the new FFRMS imposes a three-tiered process for determining the extent of the FFRMS floodplain, with a preference for a climate-informed science approach. The FFRMS expands the vertical and horizontal floodplain boundaries beyond the special flood hazard area (100-year floodplains). The rule requires more stringent elevation and flood proofing requirements of properties where federal funds are used to develop or provide financing for new construction within the now defined FFRMS floodplain. It also applies to substantial improvement to structures financed through HUD grants, subsidy programs and applicable multifamily programs. Of note, the new Rule updates HUD’s Minimum Property Standards for one- to four-unit family housing under the FHA mortgage insurance program and low-rent public housing programs to require that the lowest floor in newly constructed structures be built at least two feet above the 100-year floodplain. However, the Rule does not require consideration of the horizontally expanded FFRMS floodplain under the Minimum Property Standards.

While the regulation is effective May 23, 2024, compliance with the new elevation requirements will not be required for single-family new construction projects which have or will have submitted building permit applications prior to January 1, 2025. Conversely, demonstrated compliance with the procedures for FFRMS floodplain management and protection of wetlands is now required for FHA-insured and HUD-assisted apartment properties no later than January 1, 2025.  HUD believes these enactments will provide greater protections for communities susceptible to floods, heavy storms, severe weather events and disasters, changes in development patterns, and erosion – thus ensuring that federally funded construction projects are built to withstand current and future flood risks.

For those non-residential and commercial development projects for which this new HUD rule will apply, feel free to contact the attorneys at Giordano Halleran & Ciesla to further discuss compliance with this regulation.