FHA waives elevation requirement for single-family constructions

The Federal Housing Administration has issued a waiver on new requirements that went into effect earlier this year, which are intended to mitigate flood risk.

Initially announced last spring by the Department of Housing and Urban Development, which oversees FHA, the federal flood-risk management standard required developers to start construction on higher ground to qualify for mortgage insurance. For single- and multifamily projects financed by FHA, the department originally mandated the lowest floor of structures to be raised at least two feet above base levels in federally designated at-risk zones, which were located either on floodplains or near coastal waters. 

The new partial waiver removes the two-feet requirement for single-family residences, but language still dictates the lowest levels be located above base flood elevation. Rules stipulating that lenders obtain an elevation certificate for the properties they finance also remain intact.

The new regulation effectively reverses the two-foot requirement that was implemented on Jan. 1. The standard introduced by the Biden administration exceeded the requirements under the Federal Emergency Management Agency's National Flood Insurance Program and nearly all participating communities, HUD said.  

"The granting of this partial waiver is consistent with the department's objectives to assist borrowers with the availability and affordability of new-construction housing," the order stated. 

Maintaining the policy would "limit the land available for development and increase the cost of construction for FHA-insured properties, thereby contributing to the insufficient supply of new construction housing and rising home prices," it continued. 

The waiver shines a spotlight on the future of many regulations introduced under the previous administration, particularly with questions surrounding operations at the Consumer Financial Protection Bureau. Mortgage attorneys are advising clients to continue their work as they have done until notified a particular rule is eliminated or changed. 

Among the moves President Trump has made since taking office are several executive orders targeting policies that address climate risk or resilience. Prior to the Trump inauguration this year, the National Association of Home Builders sued HUD and the U.S. Department of Agriculture for new energy-efficiency standards on new properties introduced in 2024. An update to the new guidelines has not been issued. 

The Trump administration has also aimed to revoke initiatives encouraging diversity, equity and inclusion within the federal government, laying off employees in related positions.