The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA) recently announced that effective December 21, 2022, it will allow homeowners with FHA-insured mortgage financing to obtain flood insurance policies that conform to FHA requirements from private insurance providers. The change was announced through a final rule published in the Federal Register and in a companion Mortgagee Letter (both published in late November), that provide implementation guidance for FHA-approved lenders.
The FHA requires that insured mortgages for properties in Federal Emergency Management Agency (FEMA)-designated Special Flood Hazard Areas (SFHAs) have flood insurance. Previously, only flood insurance obtained through the National Flood Insurance Program (NFIP) was permissible for FHA-insured mortgages, which limited choices for consumers.
Click here to read the full release at HUD.gov.
