Volume 24, Number 11 ● November 16, 2016
Higher Flood Resiliency Development Standards Proposed for HUD/FHA Assisted Properties
President Obama’s Executive Order 13690 (EO 13690) of January 30, 2015 called for the creation of a new flood risk reduction standard for federally funded projects in an effort to improve the Nation’s resilience to current and future flood risks. In response, the U.S. Department of Housing and Urban Development (HUD) has acknowledged the need to make structures more resilient and on October 28, 2016 proposed higher flood resiliency regulations in accordance with EO 13690 to help ensure federal funds are not wastefully spent on projects built on land that is more prone to flooding. Any property located in these higher flood hazard areas that require HUD assistance or Federal Housing Administration (FHA) financing or insurance will be required to meet these new development standards.
The National Flood Insurance Program (NFIP) was created in response to the National Flood Insurance Act of 1968. The two main goals of the NFIP are to make flood insurance available in those communities that adopt and enforce floodplain management standards and to map flood hazard areas within participating communities to be used for establishing flood insurance rates and for managing development within and adjacent to such floodplains.
On May 24, 1977, President Carter released EO 11988 aimed at avoiding adverse impacts associated with encroachments into regulatory floodplains. On January 30, 2015, President Obama issued EO 13690 which amends EO 11988 to, among other things, establish a set of higher standards to be utilized by all Federal departments and agencies for all federally funded projects that occur in and adjacent to floodplains. WSSI provided more background information on EO 11988 and EO 13690 in our April 2015 edition of Field Notes.
HUD’s Higher Resiliency Standards
Federal assistance may be provided on various types of projects that fall under HUD’s domain. HUD provides a low rent public housing program that provides financial assistance to those that meet specific requirements. In addition, the FHA resides within HUD and provides federally backed mortgages for qualified applicants. For FHA mortgages on properties that do not meet a threshold of equity, the mortgage will require mortgage insurance, typically tacked on to a monthly mortgage payment as a Mortgage Insurance Premium. In addition, FHA mortgage insurance can be obtained for a variety of other projects.
HUD has proposed higher flood resiliency standards in response to EO 13690, which requires any project involving Federal Funds or Federal Actions that is located within or adjacent to a flood hazard area to meet the higher resiliency standards as outlined in the Federal Flood Risk Management Standard (FFRMS). Housing structures having one-to-four-units with HUD mortgage insurance or structures under low-rent public housing programs will be required to meet the higher resiliency standard of elevating to at least 2 feet above the base flood elevation (BFE). This higher standard only applies to structures within the base flood, meaning this does not apply to structures that fall within the expanded floodplain area that would be occupied by a flood 2 feet above the BFE. Other than one-to-four-unit housing with HUD mortgage insurance and low-rent public housing programs, structures receiving HUD financing and mortgage insurance must be evaluated as to whether the facility involves critical actions or non-critical actions. Such determination will both determine the horizontal flood extents within which such structures must meet higher resiliency standards and specifically define the higher standards that apply. In accordance with the FFRMS, structures that do not involve critical actions must either be elevated 2 feet above the BFE or floodproofed to such elevation. Structures that involve critical actions must be elevated above the greater of the 500-year flood elevation or 3 feet above the BFE or floodproofed to such elevation.