Acceptance of Private Flood Insurance for FHA-Insured Mortgages

Document 2022-25258 is a Final Rule published by the Department of Housing and Urban Development in the Federal Register on November 21, 2022, with an effective date of December 21, 2022. This final rule amends Federal Housing Administration (FHA) regulations to allow mortgagors the option to purchase private flood insurance on FHA-insured mortgages for properties located in Special Flood Hazard Areas (SFHAs), in satisfaction of the mandatory purchase requirement of the Flood Disaster Protection Act of 1973 (the FDPA). The FDPA, as amended, requires the owner of a property mapped in a SFHA, and located in a community participating in the National Flood Insurance Program, to purchase flood insurance as a condition of receiving a mortgage backed by the Government Sponsored Entities (GSEs), Department of Veterans Affairs (VA), U.S. Department of Agriculture (USDA), or Federal Housing Administration (FHA). In consideration of public comments, HUD's experience implementing the program, and HUD's goals of aligning with the Biggert-Waters Act while mitigating risk and protecting taxpayers' funds, this final rule adopts HUD's November 23, 2020, proposed rule with minor changes. View the original at https://www.federalregister.gov/documents/2022/11/21/2022-25258/acceptance-of-private-flood-insurance-for-fha-insured-mortgages.

No. Document 2022-25258 is not classified as economically significant under Executive Order 12866. Economically significant rules require OIRA review and are estimated to have impacts of $100 million or more per year.