# Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-06246

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 23, 2024
- **Citation:** 89 FR 30850

## Text

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 50, 55, 58, and 200
[Docket No. FR-6272-F-02]
RIN 2506-AC54
Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard

AGENCY:

Office of the Secretary, U.S. Department of Housing and Urban Development (HUD).

ACTION:

Final rule.

SUMMARY:

This final rule revises HUD's regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS) in accordance with the Executive Order titled “Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input.” These revisions to HUD's regulations will improve the resilience of HUD-assisted or financed projects to the effects of climate change and natural disasters and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances. Among other revisions, this rule provides a process for determining the extent of the FFRMS floodplain, with a preference for a climate-informed science approach (CISA) to making this determination. The rule also revises HUD's floodplain and wetland regulations to streamline, improve overall clarity, and modernize standards. Also, this rule revises HUD's Minimum Property Standards for one-to-four-unit housing under HUD's mortgage insurance and low-rent public housing programs to require that the lowest floor in newly constructed structures located within the 1-percent-annual-chance (100-year) floodplain be built at least 2 feet above the base flood elevation (BFE) as determined by best available information. The rule also revises a categorical exclusion when HUD performs environmental reviews and updates various HUD environmental regulations to permit online posting of public notices.

DATES:

Effective Date:
May 23, 2024.

Compliance Date:
Compliance with this final rule is required no later than June 24, 2024, except: compliance with this final rule's amendments to 24 CFR part 200 is required for new construction where building permit applications are submitted on or after January 1, 2025; and compliance with this final rule's amendments to 24 CFR part 55 is required no later than January 1, 2025 for the following programs: (1) Programs subject to chapter 9 of the Federal Housing Administration's (FHA) Multifamily Accelerated Processing (MAP) Guide (4430.G): Multifamily FHA, Section 202 and 811 capital advance grants, transfers under Section 8(bb) of the United States Housing Act and Section 209 of HUD's annual appropriations (or subsequent provisions), Section 8 Renewals with Capital Repairs, Rental Assistance Demonstration (RAD) conversions to Project-Based Rental Assistance (PBRA), and the Green and Resilient Retrofit Program; and (2) The other mortgage insurance programs subject to part 55: FHA Healthcare and FHA Risk Share.

FOR FURTHER INFORMATION CONTACT:

Kristin L. Fontenot, Director, Office of Environment and Energy, Office of Community Planning and Development, Department of Housing and Urban Development, 451 7th Street SW, Room 7282, Washington, DC 20410-8000. For inquiry by phone or email, contact Lauren Hayes Knutson, Director, Environmental Planning Division, Office of Environment and Energy, Office of Community Planning and Development, at 202-402-4270 (this is not a toll-free number) or email to:
EnvironmentalPlanningDivision@hud.gov.
For questions regarding the Minimum Property Standards, contact Julie Shaffer, Associate Deputy Assistant Secretary, Office of Single Family Housing, 215-861-7216. HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

On March 24, 2023, HUD published the “Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard” proposed rule (the “proposed rule”).
1

In the proposed rule, HUD explained that increased and increasing frequency of flooding and weather and climate disasters make it necessary for HUD to ensure it approves Federal investments wisely to minimize losses, particularly following repeated flooding events. The revisions to HUD's regulations implemented through this final rule will improve the resilience of HUD-assisted or financed projects to the effects of climate change and natural disasters and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances.

1
88 FR 17755. On May 11, 2023, HUD extended the original 60-day comment period provided in the proposed rule by an additional 14 days.
See
88 FR 30267.

HUD has broad general rulemaking authority under 42 U.S.C. 3535 to “make such rules and regulations as may be necessary to carry out [the Secretary's] functions, powers and duties” in order to implement its statutory mission, which is to provide assistance for housing to promote “the general welfare and security of the Nation and the health and living standards of [its] people.”
2

Under the National Housing Act, HUD has discretion to set terms upon which it will insure mortgages. 12 U.S.C. 1701
et seq.
HUD also has authority and responsibility under the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321
et seq.
):

2
42 U.S.C. 3531.

• to use all practicable means;

• to improve and coordinate Federal plans, functions, programs, and resources to the end that the Nation may:

○ fulfill the responsibilities of each generation as trustee of the environment for succeeding generations;

○ assure for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings;

○ attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences.

42 U.S.C. 4331(b).

NEPA also requires all Federal agencies to “utilize a systematic, interdisciplinary approach which will ensure the integrated use of the natural and social sciences and the environmental design arts in planning and in decision making which may have an impact on man's environment.” 42 U.S.C. 4332(2)(A). Each year, HUD provides States, local governments, and housing providers with billions of dollars in Federal financial assistance, appropriated and authorized by Congress. By taking the actions it does in this final rule, HUD protects Federal investments, preserves the environment for future generations, and promotes the health, safety, and general welfare of individuals. As described in the

proposed rule, in response to the threats that increasing flood risks pose to life and taxpayer funded property, on January 30, 2015, President Obama signed Executive Order (E.O.) 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input.
3

E.O. 13690 amended E.O. 11988, Floodplain Management, which was originally issued in furtherance of the National Flood Insurance Act of 1968, as amended (42 U.S.C. 4001
et seq.
); the Flood Disaster Protection Act of 1973, as amended (Pub. L. 93-234, 87 Stat. 975); and NEPA (42 U.S.C. 4321
et seq.
).

3
80 FR 6425 (Feb. 2, 2015). E.O. 13690 was revoked by E.O. 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects (Aug. 15, 2017); however, E.O. 13690 was reinstated by E.O. 14030, Climate-Related Financial Risk (May 20, 2021), published at 86 FR 27967.

Significantly for the purposes of this rulemaking, E.O. 13690 revised section 6(c) of E.O. 11988 to provide new approaches to establish the floodplain. E.O. 13690 provided, however, that prior to any actions implementing E.O. 13690, additional input from stakeholders be solicited and considered. Consistent with this direction, the Federal Emergency Management Agency (FEMA), as Chair of the Mitigation Framework Leadership Group (MitFLG),
4

published a notice in the
Federal Register
seeking public comment on the proposed “Revised Guidelines for Implementing Executive Order 11988, Floodplain Management” to provide guidance to agencies on the implementation of E.O. 13690 and 11988.
5

In addition, MitFLG held nine public listening sessions across the country that were attended by over 700 participants from State and local governments and other stakeholder organizations to discuss the Revised Guidelines for Implementing Executive Order 11988, Floodplain Management.
6

MitFLG considered stakeholder input and provided recommendations to the U.S. Water Resources Council (WRC).
7

4
MitFLG is a senior level group formed in 2013 to coordinate mitigation efforts across the Federal Government and to assess the effectiveness of mitigation capabilities as they are developed and deployed across the Nation. The MitFLG includes relevant local, State, Tribal, and Federal organizations. More information about MitFLG can be found at
https://www.fema.gov/emergency-managers/national-preparedness/frameworks/mitigation/mitflg.

5
80 FR 6530 (Feb. 5, 2015). The “Revised Guidelines for Implementing Executive Order 11988, Floodplain Management” is included as a supporting document with the docket associated with 80 FR 6530.

6
Specific information on the listening sessions can be found in the notices on the docket at
https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Notice.
Transcripts of those sessions are available on the docket at
https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Supporting%20%26%20Related%20Material.

7
The WRC is a statutory body tasked to maintain a continuing study and prepare an assessment of the adequacy of supplies of water necessary to meet the water requirements in each water resource region in the United States and the national interest therein. 42 U.S.C. 1962a. The WRC is a means for the coordination of the water and related land resources policies and programs of several Federal agencies. The WRC is composed of the Secretary of the Interior, the Secretary of Agriculture, the Secretary of the Army, the Secretary of Commerce, the Secretary of Housing and Urban Development, the Secretary of Transportation, the Administrator of the Environmental Protection Agency, and the Secretary of Energy.

On October 8, 2015, the WRC issued the updated “Guidelines for Implementing Executive Order 11988, Floodplain Management, and Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input” (the “Guidelines”).
8

Although the Guidelines describe various approaches for determining the higher vertical flood elevation and corresponding horizontal floodplain for federally funded projects, the Guidelines indicate that it is not meant to be an elevation standard but rather a resilience standard. Further, the Guidelines provide that all future actions where Federal funds are used for new construction, substantial improvement,
9

or to address substantial damage
10

meet the level of resilience established by the Guidelines. In implementing the Guidelines and establishing the FFRMS, Federal agencies were to select among the following three approaches for establishing the flood elevation and hazard area in siting, design, and construction:

8
The Guidelines are available at
https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf.
HUD notes that the WRC is not currently active.

9
HUD defines substantial improvement in 24 CFR 55.2(b). This final rule does not substantively change this definition except by moving it from its current location in § 55.2(b)(10) to § 55.2(b)(12) to reflect other changes to that section and by clarifying that the term “structure” includes a manufactured housing unit.

10
Substantial damage is defined in FEMA regulations at 44 CFR 59.1 as “damage of any origin sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.” For more information on substantial improvement and substantial damage,
see
FEMA, Substantial Improvement/Substantial Damage Desk Reference FEMA P-758 (May 2010), available at
https://www.fema.gov/sites/default/files/2020-08/fema_p_758_complete_r3_0.pdf.

•
Climate-Informed Science Approach (CISA):
The elevation and flood hazard area that result from using a climate-informed science approach that uses the best-available, actionable, hydrologic and hydraulic data;

•
Freeboard

11

Value Approach (FVA):
The elevation and flood hazard area that result from using the freeboard value reached by adding an additional 2 feet to the base flood elevation (the 100-year, or 1-percent-annual-chance flood elevation) for non-critical actions and by adding an additional 3 feet to the base flood elevation for critical actions, or

11
Freeboard is defined by FEMA as “a factor of safety usually expressed in feet above a flood level for purposes of floodplain management. `Freeboard' tends to compensate for the many unknown factors that could contribute to flood heights greater than the height calculated for a selected size flood and floodway conditions, such as wave action, bridge openings, and the hydrological effect of urbanization of the watershed.” 44 CFR 59.1.
See also
FEMA, National Flood Insurance Program Terminology Index, available at
http://www.fema.gov/freeboard.

•
0.2-Percent-Annual-Chance (500-Year) Flood Approach:
The elevation and flood hazard area that result from using the 0.2-percent-annual-chance flood approach (500-year flood elevation).

The FVA and 0.2-percent-annual-chance flood approach result in higher elevations than the base flood elevation with correspondingly larger horizontal floodplain areas. CISA will generally have a similar result, with the exception that agencies using CISA may find the resulting elevation to be equal to or lower than the current elevation in some areas due to the nature of the specific climate change processes and physical factors affecting flood risk at the project site. However, as a matter of policy established in the Guidelines, CISA should only be used if the resulting flood elevation is at least equal to or higher, depending on the criticality of the action, than current base flood elevation.

In response to comments received on the Guidelines, MitFLG included an appendix that explained CISA. Appendix H of the Guidelines
12

explains that CISA treats the future as potentially non-stationary; considers local conditions as well as global change; accommodates other factors beyond those that are climate-related; and assists in bounding the decision space by considering plausible future conditions appropriate to a given decision. CISA uses existing sound science and engineering methods as have historically been used to implement E.O. 11988 but supplemented with best available

climate-related scientific information when appropriate. CISA is consistent with the climate science and related information found in the latest National Climate Assessment report or other best-available, actionable science. CISA combines information from different disciplines (like atmospheric sciences, coastal sciences, oceanographic sciences) in addition to traditional science and engineering approaches. CISA should include impacts from projected land cover and land use changes, long-term coastal and/or riverine erosion, and vertical land movement expected over the lifecycle of the action.

12
The appendices to the Guidelines are available at
https://www.fema.gov/sites/default/files/documents/fema_IGA-appendices-a-h_10082015.pdf.

As described in the Guidelines, CISA relies on best available and actionable science. Best available means data and science that is transparent, technically credible, usable, legitimate, and flexible. Actionable science consists of theories, data, analyses, models, projects, scenarios, and tools that are relevant to the decision under consideration; reliable in terms of its scientific or engineering basis and appropriate level of peer review; understandable to those making the decision; supportive of decisions across wide spatial, temporal, and organization ranges; and co-produced by scientists, practitioners, and decision-makers. Appendix H indicates that different approaches are appropriate for coastal and riverine flooding because the directional change of local sea level plus storm surge is generally known for coastal flood risk but, for riverine, it is difficult to determine the direction of changes in precipitation and resulting flood elevations. As a result, the MitFLG recommended that coastal flood risks agencies take into account mean sea level rise scenarios that are adjusted to reflect local conditions to identify CISA. The MitFLG and Appendix H to the Guidelines do not provide a similar hydrologic standard for CISA for riverine flood risks because of the limitations on best-available and actionable science.

In 2023, Federal agencies participating in the White House Flood Resilience Interagency Working Group
13

reviewed the science behind CISA and concluded that incorporating the latest projections of sea level rise in evaluation of future coastal flood risk continues to be best practice and actionable science, whereas the science surrounding the climate change impacts to precipitation and inland flooding is not mature enough to establish one CISA standard for riverine flooding.
14

In August 2023, the White House Flood Resilience Interagency Working Group released a job aid to assist agencies with their responsibility to identify the floodplain using the three approaches.
15

13
More information about the White House Flood Resilience Interagency Working Group can be found at
https://www.whitehouse.gov/ceq/news-updates/2021/08/27/readout-of-the-first-white-house-flood-resilience-interagency-working-group-meeting-on-implementation-of-the-federal-flood-risk-management-standard/.

14

See
Federal Flood Risk Management Standard Climate-Informed Science Approach (CISA) State of the Science Report (March 2023),
https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf.

15

See
FFRMS Floodplain Determination Job Aid (August 2023),
https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf.

E.O. 11988 directs Federal agencies to avoid, to the extent possible, the long- and short-term adverse impacts associated with the occupancy and modification of floodplains and to avoid direct and indirect support of floodplain development wherever there is a practicable alternative. Floodplains are found both in coastal flood areas, where rising tides and storm surge are often responsible for flooding, and in riverine flood areas where moving water bodies may overrun their banks due to heavy rains or snow melt. E.O. 11988 directs each agency to evaluate the potential effects of any actions it may take in a floodplain; to ensure that agency planning programs and budget requests reflect consideration of flood hazards and floodplain management; and to identify the floodplain area.

E.O. 11988, as amended, requires agencies to take a scientific approach to determine if a proposed action is in or affects a floodplain. The result of this analysis is often most easily conveyed via a map, making floodplain maps ubiquitous with the process of identifying the floodplain, though, in process, they are separate. The identification of the floodplain is the analysis the agencies have been tasked with carrying out under E.O. 11988 and maps are the visual representation of that analysis. Because flood risk can change over time, FEMA and the National Flood Insurance Program (NFIP) program continually revise Flood Insurance Rate Maps (FIRMs), advisory base flood elevations and preliminary floodplain maps and studies to incorporate new information and reflect the current understanding of flood risk. E.O. 13690 amended E.O. 11988 to direct agencies to update the floodplain using one (or a combination) of the three approaches listed above, which are incorporated in the FFRMS.

Communities across the Nation have proactively strengthened their local floodplain management codes and standards to ensure that buildings and infrastructure are resilient to flood risk. By implementing the FFRMS, HUD's standards will better align with these actions and better protect against future flood risk, considering climate informed science, where available. At the same time, HUD recognizes that the need to make structures resilient also requires a flexible approach to adapt to the needs of the Federal agency, local community, and the circumstances surrounding each project or action.

II. This Final Rule

In its 2021 Climate Action Plan,
16

HUD committed to completing rulemaking to update 24 CFR part 55 and implement FFRMS as a key component of HUD's plan to increase climate resilience and climate justice across the Department, noting that underserved communities are disproportionately impacted by climate change.
17

Development of equitable strategies to protect low- to moderate-income persons and businesses serving communities disproportionately impacted by climate change is at the core of HUD's mission to create strong, sustainable, inclusive communities. This final rule will improve the resilience of HUD-assisted or financed projects to the effects of climate change and natural disasters and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances.

16
U.S. Department of Housing and Urban Development, Climate Action Plan (Nov. 2021), available at
https://www.hud.gov/climate.

17

See also
Marino, E.K., K. Maxwell, E. Eisenhauer, A. Zycherman, C. Callison, E. Fussell, M.D. Hendricks, F.H. Jacobs, A. Jerolleman, A.K. Jorgenson, E.M. Markowitz, S.T. Marquart-Pyatt, M. Schutten, R.L. Shwom, and K. Whyte, 2023: Ch. 20. Social systems and justice. In:
Fifth National Climate Assessment
. Crimmins, A.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, B.C. Stewart, and T.K. Maycock, Eds. U.S. Global Change Research Program, Washington, DC, USA, available at
https://doi.org/10.7930/NCA5.2023.CH20.

HUD notes that affordable housing is increasingly at risk from both extreme weather events and sea level rise, with coastal communities especially at risk. Recent peer-reviewed analysis and mapping by independent research organization Climate Central projects that the number of affordable housing units at risk from flooding in coastal areas will triple by 2050,
18

and a 2019 report from the Denali Commission found that 144 Native Alaskan Villages face infrastructure damage from erosion, flooding, and permafrost thaw.
19

18
Maya K. Buchanan et al. (2020). Environ. Res. Lett., 15, 124020.

19
Alaska Division of Geological & Geophysical Surveys. February 23, 2021.

Alaska's

Environmentally Threatened Communities.

ArcGIS,
https://storymaps.arcgis.com/stories/2a0d221e55ca48dd8092427b50a98804
(
interpreting
University of Alaska Fairbanks Institute of Northern Engineering et al.,
Statewide Threat Assessment: Identification of Threats from Erosion, Flooding, and Thawing Permafrost in Remote Alaska Communities—Report Prepared for the Denali Commission
), November 2019, available at
https://www.denali.gov/wp-content/uploads/2019/11/Statewide-Threat-Assessment-Final-Report-20-November-2019.pdf.

HUD's experience in the wake of flood disasters is that unless structures in flood-prone areas are properly designed, constructed, and elevated, they may not withstand future severe flooding events. This risk is exacerbated by climate change and projected increases in hurricane rainfall and intensity as well as other precipitation throughout most of the United States. This final rule provides for a more forward-looking approach to floodplain management, which bases decisions not just on past flooding but on how flood risk is anticipated to grow and change over the anticipated life of a project.

This final rule expands the floodplain of concern from the 1-percent-annual-chance floodplain to the FFRMS floodplain, designated based on projected future flood risk, to ensure that HUD projects are designed with a more complete picture of a proposed project site's flood risk over time. Flood risk projection based on current climate science can help HUD meet the objectives of E.O. 11988, including avoidance of floodplain impacts and minimization of such impacts where there is no practicable alternative to locating a HUD-assisted activity in proximity to flood sources. Adequate elevation of structures is a key minimization strategy, together with complementary natural ecosystem processes and nature-based approaches, to promote the preservation of beneficial floodplain functions.

As recognized by MitFLG and directed by the FFRMS and E.O. 13690, requiring structures located within the expanded FFRMS floodplain to be elevated or floodproofed to an additional elevation above the base flood elevation will increase resiliency and reduce loss of life, property damage, and other economic loss, and can also benefit property owners by reducing flood insurance rates. These higher standards provide an extra buffer above the base flood elevation based on the best available information to improve the long-term resilience of communities. Additionally, higher standards help account for increased flood risk associated with projected sea level rise, increased rainfall, and other climate risks, which are not considered in current FEMA maps and flood insurance costs. As stated in the report “Global and Regional Sea Level Rise Scenarios for the United States” (February 2022) by the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA),
20

scientists are confident that global sea level will rise by between about 1 and as much as 6.56 feet by the year 2100.
21

The higher standards required, in some cases, by this final rule allow HUD to do more to address these increasing risks.

20
Sweet, W.V., B.D. Hamlington, R.E. Kopp, C.P. Weaver, P.L. Barnard, D. Bekaert, W. Brooks, M. Craghan, G. Dusek, T. Frederikse, G. Garner, A.S. Genz, J.P. Krasting, E. Larour, D. Marcy, J.J. Marra, J. Obeysekera, M. Osler, M. Pendleton, D. Roman, L. Schmied, W. Veatch, K.D. White, and C. Zuzak, 2022: Global and Regional Sea Level Rise Scenarios for the United States: Updated Mean Projections and Extreme Water Level Probabilities Along U.S. Coastlines. NOAA Technical Report NOS 01. National Oceanic and Atmospheric Administration, National Ocean Service, Silver Spring, MD, 111 pp.,
https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html.

21

Id. See also
NOAA Climate Change Program Office, United States Global Change Research Program, U.S. Climate Resilience Toolkit, available at
https://toolkit.climate.gov/topics/coastal/sea-level-rise.

Choosing alternative sites outside the FFRMS floodplain and requiring additional elevation above the base flood elevation may also lead to a net reduction of expected housing costs over time. HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Flood insurance is a key financial tool to manage potential rebuilding costs and can make homes in risky areas more expensive due to their greater flood risk. By elevating additional feet above the base flood elevation, homeowners may benefit from flood insurance premium reductions that will increase long-term affordability.

Through this final rule, HUD is prioritizing using CISA in defining the floodplain because it provides a forward-looking assessment of flood risk based on likely or potential climate change scenarios, regional climate factors, and an advanced scientific understanding of these effects. Therefore, in this final rule, HUD will require the use of CISA, where data is available and actionable, to establish the required level of flood resilience for floodplain management decision making, elevation of structures, and floodproofing. In areas where CISA data is not currently available and actionable to define the FFRMS floodplain, as described in this final rule, HUD will typically require that the FFRMS floodplain to be based on the FEMA-mapped 0.2-percent-annual-chance floodplain or a freeboard height above the FEMA-mapped 1-percent-annual-chance floodplain, as further described in the subsection that follows. As CISA data availability improves over time and over a greater area, HUD expects the use of CISA to increase.

Beyond implementing the FFRMS floodplain and elevation requirements, this final rule implements broader changes to modernize and improve 24 CFR part 55 in accordance with the Department's climate adaptation, environmental justice, and equity priorities. These revisions explicitly recognize HUD's responsibility to consider the environmental justice impact of the Department's actions within the floodplain management and decision making process. To meet HUD's affordable housing and community development mission more effectively and efficiently, this final rule also streamlines decision making for activities that mitigate flood risk, avoid wetland losses, or provide co-benefits that directly contribute to HUD's efforts to reduce climate impacts. This final rule also strengthens HUD's commitment to use nature-based floodplain management approaches, where practicable, by identifying specific strategies and practices that have proven effective in increasing flood resilience and environmental quality.

HUD notes that adherence to the requirements in this final rule does not modify any party's responsibilities or obligations under any other Federal laws, including statutes and regulations administered by other Federal agencies.

A. Federal Flood Risk Management Standard (FFRMS) Floodplain

To implement the framework described in this rule, this final rule defines the FFRMS floodplain in a new 24 CFR 55.7. This new section establishes a three-tiered approach to define the FFRMS floodplain, depending on the data available in the project area.

1.
Climate Informed Science Approach (CISA):
The FFRMS floodplain is defined as areas designated as having an elevated flood risk during the anticipated life of the project based on CISA. CISA will generally use the same methodology for both critical and non-critical actions; however, the selection of climate change scenarios used for future projections should account for the lower tolerance of risk based on the action's criticality. Where

part 55 applies,
22

CISA is the required approach to define the FFRMS floodplain if data is available and actionable. When preparing an Environmental Impact Statement (EIS), an analysis of sea level rise and other climate impacts utilizing CISA and other climate risk tools will be required regardless of whether pre-existing data is available for reference. Because EIS level projects have such a high potential for adverse impacts, HUD believes climate informed science is necessary to fully understand the potential environmental concerns, where available and actionable data exists or can be generated in accordance with 42 U.S.C. 4336(b)(3).

22
All HUD programs, with the exception of programs that are not subject to NEPA (
e.g.,
the Federal Housing Administration single family program and the Housing Trust Fund), are subject to part 55. Certain projects may be exempt from part 55 based on project activities, as discussed in § 55.12 of this final rule.

2.
0.2-Percent-Annual-Chance Flood Approach (0.2 PFA):
For non-critical actions, where CISA data or other types of CISA analysis is not available or actionable, but FEMA has defined the 0.2-percent-annual-chance floodplain, the FFRMS floodplain is defined as those areas that FEMA has designated as within the 0.2-percent-annual-chance floodplain. For critical actions where CISA data is not available nor actionable, the FFRMS floodplain is defined as either the area within the 0.2-percent-annual-chance floodplain or the area that results from adding an additional three feet to the base flood elevation, whichever results in the larger floodplain and higher elevation. For any action, newly constructed or substantially improved structures within this definition of the FFRMS floodplain are required to be elevated to or above the FFRMS floodplain.

3.
Freeboard Value Approach (FVA):
For non-critical actions, if CISA data is not available or actionable and the FEMA 0.2-percent-annual-chance floodplain is not defined, the FFRMS floodplain is defined as those areas, including the horizontal extent, that result from adding an additional two feet to the base flood elevation as established by the effective FEMA FIRM or Flood Insurance Study (FIS). If available, a FEMA-provided interim or preliminary FIRM, FIS, or advisory base flood elevation, whether regulatory or informational in nature, may also be used; however, an interim or preliminary FEMA analysis map may not be used if the mapped base flood elevation is lower than the current FIRM or FIS. For critical actions where CISA data is not available or actionable and where the 0.2-percent-annual-chance floodplain elevation is not defined, the FFRMS floodplain is defined as those areas, including the horizontal extent, that result from adding an additional three feet to the base flood elevation.

If CISA data is not available or actionable and FEMA FIRMs, FIS, preliminary maps, and advisory base flood elevations are unavailable or insufficiently detailed to determine base flood elevation, other Federal, State, local, or Tribal data may be used as “best available information” to define the 1-percent-annual-chance floodplain.

B. Climate Informed Science Approach—Availability and Actionability of Data

As described throughout this final rule, CISA is the preferred approach to define the FFRMS floodplain. In § 55.7, HUD requires that the FFRMS floodplain be defined using CISA where data is available and actionable.

As described in § 55.7, HUD considers CISA data to be available and actionable for a particular project where: (1) the data is included in a tool, resource, or other process developed or identified by a Federal agency or agencies to define the floodplain using CISA, and (2) HUD has adopted the particular tool, resource, or other process through a
Federal Register
notice for comment. As a matter of policy, HUD has decided to publish a
Federal Register
notice for comment prior to the use of a particular tool, resource, or other process under § 55.7.

Regardless of whether HUD has adopted a particular tool, resource, or other process to define the floodplain using CISA, this final rule at § 55.7(f) permits HUD or a responsible entity to voluntarily define the FFRMS floodplain utilizing CISA when a State, Tribal, or local government has formally adopted, through code or other formal adoption measures, a tool, resource, or other written standards that provides data or other methods to identify the FFRMS floodplain using CISA for a particular project. In addition, HUD may identify additional tools, resources, or other processes that a responsible entity may voluntarily use to define the FFRMS floodplain using CISA. HUD or a responsible entity has the option to utilize a tool, resource, written standard, or other process permitted in § 55.7(f) where it results in an elevation that is at least as high as the lowest of (1) the 0.2-percent-annual-chance floodplain elevation; (2) the elevation that results from adding an additional two feet to the base flood elevation; or (3) the elevation required by paragraphs (b) or (c) of § 55.7, if CISA data is available and actionable under paragraphs (b)(1) or (c)(1). Where HUD or a responsible entity voluntarily defines the FFRMS floodplain using the options in paragraphs (f)(1)(i) or (f)(1)(ii) of § 55.7, the criticality of the action must be considered when determining the appropriate elevation of the FFRMS floodplain.

C. Revised Definitions

This final rule revises various definitions in 24 CFR 55.2. The definitions are revised as follows:

Best available information:
The final rule relocates the definition of “best available information” from within the definition of coastal high hazard area in 24 CFR 55.2 to two new sections, 24 CFR 55.7 and 55.8. The final rule also adjusts the definitions of “0.2-percent-annual-chance (500-year) floodplain,” “floodway,” and “1-percent-annual-chance (100-year) floodplain,” to reflect these new citations.

Sources of best available information for identifying the FFRMS floodplain are described in 24 CFR 55.7 according to CISA, 0.2-Percent-Annual-Chance Flood Approach, and FVA methods. Best available information sources for floodways, coastal high hazard areas, and areas within the Limit of Moderate Wave Action (LiMWA) are identified in 24 CFR 55.8 and include effective and advisory or preliminary FEMA analysis reflected in FEMA's maps.

Critical action:
The final rule revises the definition of “critical action” to include community stormwater management infrastructure and water treatment plants as examples of utilities or services that could become inoperative during flood and storm events.

Federal Flood Risk Management Standard (FFRMS) floodplain:
The final rule adds the definition of FFRMS floodplain.

0.2 percent-annual chance floodplain:
The final rule updates the definition of “0.2-percent-annual-chance floodplain” to be consistent with the new definition of FFRMS floodplain. The final rule also removes the statement that the 0.2-percent-annual-chance floodplain is the minimum area of concern for critical actions, which is not consistent with HUD's implementation of FFRMS when CISA data is available and actionable.

Impervious surface area:
The final rule adds the definition of “impervious surface area” to provide an objective criterion for use in §§ 55.8(a)(1), 55.12, and 55.14.

Limit of Moderate Wave Action (LiMWA):
The final rule adds the definition of “Limit of Moderate Wave Action (LiMWA).” The LiMWA is the

inland limit of the portion of Coastal A Zone where wave heights can be between 1.5 and 3 feet during a base flood event, subjecting properties to damage from waves and storm surge.
23

The area on the flood map between the coastal high hazard area (Zone V) and the LiMWA is called the Coastal A Zone, and laboratory tests have consistently confirmed that wave heights within the Coastal A Zone can cause significant damage to structures that are not constructed to withstand coastal hazards.
24

Consistent with the risks posed by these coastal hazards, this final rule requires structures within the Coastal A Zone to be built to Zone V standards.

23
The LiMWA marks the inland limit of the “Coastal A Zone,” a term referenced by building codes and standards. The Coastal A Zone is the part of the coastal Special Flood Hazard Area (SFHA) where wave heights can be between 1.5 and 3 feet during the base flood event, see
https://www.fema.gov/sites/default/files/documents/fema_coastal-glossary.pdf.

24

See, e.g.,
Federal Emergency Management Agency, National Flood Insurance Program, Answers to Questions About the NFIP, available at
https://agents.floodsmart.gov/nfip-answers-to-questions.

New construction:
The final rule removes the definition for new construction from § 55.2 and incorporates it into a new § 55.10, “Limitations on HUD assistance in wetlands.” The definition is also revised to provide additional context on construction actions.

Wetlands:
The final rule revises the definition for “wetlands” by removing the part of the definition that described how wetlands are determined and moves that description to a new § 55.9, “Identifying wetlands.” The final rule also removes the non-exhaustive list of examples of what does not constitute a wetland because it is not necessary to list things that the definition does not cover and in order to avoid confusion about certain areas around deep water aquatic habitats that may be considered wetlands.

D. Assignment of Responsibilities

This final rule clarifies in 24 CFR 55.3 that HUD Assistant Secretaries, the HUD General Counsel, and the President of the Government National Mortgage Association shall take responsibility for all decisions made under their jurisdictions that are made pursuant to the decision making process in 24 CFR 55.20. The final rule also revises the duties of grantees and applicants for clarity and adds a new § 55.3(f) that codifies the role of third-party providers.

E. Notification of Floodplain Hazard

This final rule revises HUD's regulations requiring notification of floodplain hazard. The notification requirements in 24 CFR 55.21 and conveyance restrictions in 24 CFR 55.22 are moved to a new 24 CFR 55.4. This creation of the new § 55.4 emphasizes the importance of providing notice as early in the process as possible. Section 55.4 retains the requirement that HUD (or HUD's designee) or the responsible entity must ensure that any party participating in a financial transaction for a property located in a floodplain and any current or prospective tenant is notified of the hazards of the floodplain location. In addition, 24 CFR 55.4 defines the notification requirements for property owners, buyers, developers, and renters and identifies specific hazards and information that must be included in these notices based on the interests of these parties.

The required information for owners, buyers, and developers includes the requirement or option to obtain flood insurance, the approximate elevation of the FFRMS floodplain, proximity of the site to flood-related infrastructure including dams and levees,
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ingress and egress or evacuation routes, disclosure of information on flood insurance claims filed on the property, and other relevant information such as available emergency notification resources. For HUD-assisted, HUD-acquired, and HUD-insured rental properties, new and renewal leases are required to include acknowledgements signed by residents indicating that they have been advised that the property is in a floodplain and flood insurance is available for their personal property. Renters must also be informed of the location of ingress and egress or evacuation routes, available emergency notification resources, and emergency procedures for residents in the event of flooding. HUD encourages a proactive and systematic approach to notification requirements for properties in floodplains to ensure that prospective buyers and renters are made aware of potential flood risk with sufficient warning so that they can make risk-informed decisions.

25
Proximity to flood control infrastructure can be identified through the U.S. Army Corps of Engineers' National Levee Database and National Inventory of Dams,
https://levees.sec.usace.army.mil/.

The final rule also moves the conveyance restrictions for the disposition of multifamily real property from 24 CFR 55.22 to 24 CFR 55.4 with minimal changes to reflect updated floodplain terminology.

F. Flood Insurance

To address the issues of flood insurance requirements more comprehensively in the context of 24 CFR part 55 decision making, this final rule consolidates and moves all applicable flood insurance requirements to a new § 55.5. The flood insurance topic requirements covered in the new § 55.5 include Flood Disaster Protection Act (FDPA) limitations on HUD program participation for properties in communities not participating in FEMA's NFIP and on HUD disaster assistance for property damage in a special flood hazard area where previous flood disaster assistance required maintenance of flood insurance and the insurance was not maintained. In addition, § 55.5 includes the much more frequently applicable FDPA requirement for HUD-assisted projects regarding the mandatory purchase of flood insurance within the Special Flood Hazard Area (SFHA) as designated by FEMA on the effective FIRM or FIS, and the NFIP plays an important role in minimization measures to reduce flood losses.

The new § 55.5 also includes new language clarifying that HUD or the responsible entity may require flood insurance beyond the minimums established in the FDPA or by a State, locality, Tribe, or part 55 when necessary to minimize financial risk. Also, the new § 55.5 clarifies that mortgagees participating in a HUD assistance or mortgage insurance or guarantee program may impose additional flood insurance requirements.

While nothing in part 55 requires flood insurance outside of the SFHA, HUD strongly encourages that flood insurance be obtained and maintained for all structures within the FFRMS floodplain to mitigate financial losses. It may also be appropriate for high-value structures to maintain more flood insurance than is available under the NFIP. The maximum available building coverage through the NFIP is $250,000 for single family structures of one-to-four units and $500,000 for multifamily structures with five or more housing units and commercial structures.
26

For example, for FHA multifamily programs, the MAP Guide provides for flood insurance in an amount at least equal to the greater of: (1) the maximum flood insurance available for that type of property under the NFIP; or (2) an amount equal to the replacement cost of

the bottom two stories above grade.
27

For larger structures in more expensive areas, it may be necessary to obtain private flood insurance to insure up to the full replacement cost of the structure or owners may risk catastrophic financial losses even with NFIP coverage.

26

See
FEMA, Flood Insurance and the NFIP Fact Sheet (June 14, 2021), available at
https://www.fema.gov/fact-sheet/flood-insurance-and-nfip.

27

See
MAP Guide, sec. 3.9.2.3, available at
https://www.hud.gov/program_offices/administration/hudclips/guidebooks/hsg-GB4430. See also
form HUD-92329, available at
https://www.hud.gov/program_offices/administration/hudclips/forms/hud9.
Per the NFIP definition, the grade level is defined as the lowest or highest finished ground level that is immediately adjacent to the walls of the building. Use natural (pre-construction), ground level, if available, for Zone AO and Zone A (without BFE).

G. Compliance

This final rule creates a new § 55.6 regarding complying with the requirements for floodplain management and protection of wetlands by outlining the process HUD or the responsible entity must follow to determine whether compliance with part 55 is required. The new § 55.6 also describes how to determine whether the 8-step decision making process
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is required and whether the proposed action would require notification and flood insurance. The new § 55.6 does not create any new requirements but, to assist practitioners, § 55.6 does provide a process to comply with part 55. The new § 55.6 also moves a summary of documentation requirements from § 55.27 to § 55.6(d).

28
For a discussion of the decision making process in the
Guidelines, see Guidelines for Implementing Executive Order 11988, Floodplain Management, and Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input
(October 8, 2015).

This final rule also creates a new section regarding limitations on HUD assistance in floodplains at § 55.8 and revises § 55.10 to address the topic of limitations on HUD assistance in wetlands. Sections 55.8 and 55.10 largely maintain the restrictions that existed prior to this final rule but with some revisions and additions. For example, § 55.8(b) maintains the current requirement that all decisions be based on the best available flood data provided by FEMA unless the current effective data indicates a higher flood risk than interim or preliminary sources.

In order for HUD assistance to be used in a proposed activity, § 55.8(c) requires that HUD or the responsible entity take measures to address repeat flood losses associated with structures identified by FEMA as Severe Repetitive Loss (SRL) properties.
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When FEMA has approved improvements designed to prevent repeated flood losses at the SRL property and communicated these to the property owner, completion of this FEMA-identified mitigation qualifies the structure to be listed as “Mitigated” and may reduce the flood insurance premium of the SRL property. To ensure that HUD substantial improvement, reconstruction, or new construction funding and HUD-required mitigation identified in the 8-step decision making process delivers this benefit, under § 55.8(c) HUD or the responsible entity must identify and incorporate the FEMA identified SRL mitigation within Step 5 (minimization of impacts) of the 8-step decision making process at § 55.20. The intent of this addition is to preserve lives and property, avoid repeated flood losses, potentially reduce flood insurance costs, and ensure that HUD-identified mitigation at a minimum meets the level of mitigation required by FEMA to be listed as “Mitigated” in its NFIP database.

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SRL properties are defined following current FEMA standards. In its April 2020 NFIP Flood Insurance Manual, FEMA designates NFIP-insured single family or multifamily residential buildings as SRL where:

1. The building has incurred flood-related damage for which four or more separate claims payments have been made, with the amount of each claim (including building and contents payments) exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000; or

2. At least two separate claims payments (building payments only) have been made under such coverage, with the cumulative amount of such claims exceeding the market value of the building.

In both instances, at least two of the claims must be within 10 years of each other, and claims made within 10 days of each other will be counted as one claim. In determining SRL status, FEMA considers the loss history since 1978, or from the building's construction if it was built after 1978, regardless of any changes in the ownership of the building. The term “SRL property” refers to either an SRL building or the contents within an SRL building, or both. The most recent designations can be found in Appendix I of the April 2020 NFIP Flood Insurance Manual, available at
https://www.fema.gov/sites/default/files/2020-05/fim_appendix-i-severe-repetitive-loss-properties_apr2020.pdf.

H. Incidental Floodplain Exception

For purposes of defining when projects with onsite floodways may proceed, this final rule removes floodways, as well as coastal high hazard areas and the LiMWA, from the incidental floodplain exception at § 55.12(c)(7) and replaces it with the new § 55.8(a)(1), which covers limitations on HUD assistance in floodways. The new § 55.8(a)(1) clarifies that HUD assistance may be used in floodways in two circumstances:

1. Where an exception in § 55.12 applies. This is not a change from HUD's existing regulations.

2. Where all structures and most improvements are removed from the floodway and a permanent covenant or comparable restriction would prevent future development or expansion of existing uses in the floodplain and/or wetland. Rehabilitation activities, including reconstruction in the case of Presidentially declared disasters, that do not expand existing uses in the FFRMS floodplain outside of the floodway are permitted under the new § 55.8. This exception combines aspects of the existing exceptions for floodplain restoration activities and incidental floodplains and allows for limited improvements in the floodway, including functionally dependent uses, utility lines, de minimis improvements, and removal of existing structures or improvements. This option allows for a broader range of activities in the floodway and in the adjacent FFRMS floodplain than is permitted under the current incidental floodplain exception. This option does require projects with onsite floodways to complete the 8-step decision making process in § 55.20 and determine that there are no practicable alternatives before approving any proposed activity on a site that includes a floodway.

This final rule maintains a narrower version of the existing incidental floodplain exception as applied to the FFRMS floodplain (not including floodways, coastal high hazard areas, or within the LiMWA) in the revised § 55.12(g). The revised § 55.12(g) allows projects to proceed without completing the 8-step decision making process where an incidental portion of the project site falls within the FFRMS floodplain.

I. Identifying Wetlands and Limitations on HUD Assistance in Wetlands

This final rule adds a new § 55.9 and revises § 55.10 to address issues regarding wetlands identification and HUD's limitations on work impacting wetlands.

The new § 55.9, “Identifying Wetlands,” builds on the definition of “wetlands” in § 55.2(b)(13) by clarifying common areas of confusion and removes unnecessary procedural requirements. Section 55.9 revises HUD's current regulations to address limitations associated with the exclusive use of the National Wetlands Inventory (NWI) for wetlands screening.
30

This final rule broadens the wetlands definition beyond NWI screening alone and addresses the potential for data gaps or outdated information by requiring that HUD and

responsible entities supplement the NWI with a visual observation of the property to assess wetlands indicators. Where these sources do not provide a conclusive answer as to whether a wetland is present, practitioners may use one of three methods to determine the presence or absence of a wetland: (1) consultation with the U.S. Fish and Wildlife Service (USFWS); (2) reference to other Federal, State, and/or local resources and site analysis by the environmental review preparer; or (3) a wetlands evaluation prepared by a qualified wetlands scientist. This process of determining the presence or absence of a wetland increases flexibility and avoids unnecessary consultation with the USFWS without increasing the risk that wetlands will not be accurately identified.
31

30
The U.S. Fish and Wildlife Service maintains the NWI. For more information regarding the NWI, see the U.S. Fish and Wildlife Service's National Wetlands Inventory website, available at
https://www.fws.gov/program/national-wetlands-inventory.

31
This approach is specific to HUD's regulations and differs from the United States Army Corps of Engineers' (USACE) current process for jurisdictional wetland determination identified in the USACE Wetland Delineation Manual.

The revised § 55.10, “Limitations of HUD Assistance in Wetlands,” explicitly defines the procedural requirements for projects with the potential to directly or indirectly impact on- or off-site wetlands. These revisions to § 55.10 codify and clarify existing policies on wetlands compliance without imposing new requirements.

J. Clarification and Revisions of Exceptions

This final rule breaks down the exceptions in the current § 55.12(a)-(c) into three separate sections, §§ 55.12, 55.13, and 55.14. This revision improves the overall clarity of the three distinct categories of excepted activities: (1) those that are excluded from all compliance with part 55 (§ 55.12); (2) those that must comply with the standards and limitations in part 55, such as prohibitions on activities in floodways but that are not required to complete the 8-step decision making process (§ 55.13); and (3) those that may complete the modified 5-Step decision making process in lieu of the full 8-step decision making process (§ 55.14). Beyond this revision, the final rule makes only limited changes to the exceptions themselves.

1. Exceptions in § 55.12

Based on HUD's experience and activities reflected in environmental review records for floodplain restoration projects, this final rule provides flexibility for floodplain-compatible parks and recreation uses routinely combined with floodplain and wetland restoration and preservation work. In the revised 24 CFR 55.12, “Inapplicability of 24 CFR part 55 to certain categories of proposed actions,” this final rule expands on the existing exception for floodplain and wetland restoration and preservation activities to allow certain structures and improvements designed to be compatible with the beneficial floodplain or wetland function of a property.

Two exceptions are removed through this final rule. The exception for sites where FEMA has issued a Letter of Map Amendment (LOMA) or Letter of Map Revision (LOMR) in the current § 55.12(c)(8) is removed. HUD is removing the exception described in the current § 55.12(c)(8)(i) because a FEMA determination, through the LOMA/LOMR process, that a location is outside of the 1-percent-annual-chance floodplain or above base flood elevation is not intended to state whether the location is or is not within the FFRMS floodplain. HUD is removing the exception described in the current § 55.12(c)(8)(ii) on conditional LOMAs and conditional LOMRs for the same reason, as well as because this exception can incentivize adding fill in a floodplain in a manner that reduces floodplain function in adjoining areas by excepting such actions from compliance with part 55. HUD is changing this policy to disincentivize the use of sitewide fill and require completion of the 8-step decision making process before adding fill to modify a floodplain.

HUD is also removing the exception described in the current § 55.12(c)(11) for projects related to ships and waterborne vessels because these are not activities that generally receive HUD funds and practitioners have expressed confusion over its presence in the rule.

2. Exceptions in §§ 55.13 and 55.14

The final rule makes minimal changes to the activities listed in the current § 55.12(a) and (b), which must comply with the requirements in part 55 but do not trigger the full 8-step decision making process. The final rule makes clarifying changes to the requirements currently listed in § 55.12(a)(3) and (4) that the footprint of the structure and paved areas are not significantly increased. Through this final rule, the new § 55.14(c) and (d) require that the footprint of the structure and paved areas are not increased by more than 20 percent. The final rule also includes a clarification for the requirement currently listed in § 55.12(b)(5)(iii) that the approval of financial assistance to lease an existing structure located in the floodplain requires that the structure be insured to the maximum in order to meet the exception. This existing provision was inadvertently omitted from the text of the proposed rule. The final rule provision also clarifies that this exception applies to financial assistance to lease both an existing structure and units within an existing structure.

Notably, the final rule adds two new exceptions:

1.
Section 55.13(f).
For special projects dedicated to improving energy or water efficiency of utilities or installing renewable energy that do not meet the threshold for substantial improvement, the new § 55.13(f) limits procedural hurdles to energy or water efficiency retrofit projects, which have limited potential to adversely affect floodplains or wetlands.

2.
Section 55.14(e).
For repairs, rehabilitation, or replacement of certain infrastructure with limited impact on impervious surface area, including streets, curbs, and gutters, § 55.14(e) provides an exception for smaller scale infrastructure projects that had been lacking from part 55. This added exception does not apply to critical actions, levee systems, chemical storage facilities (including any tanks), wastewater facilities, or sewer lagoons, all of which would require the 8-step decision making process.

K. 8-Step Decision Making Process

For actions that trigger the 8-step decision making process in whole or in part, the final rule makes several revisions to § 55.20 to implement FFRMS, clarify proper completion of each of the 8 steps of the decision making process, and otherwise modernize requirements. These revisions include:

1. Codifying roles and responsibilities in the 8-step decision making process, which have been frequently misunderstood.

2. Editing for consistency with FFRMS and new paragraphs on identification and limitations associated with the FFRMS floodplain and wetlands.

3. Adding an option to publish public notices in Steps 2 and 7 on an appropriate government website as an alternative to a printed news medium.

4. Inserting further clarifications and examples of required and suggested analysis.

5. Adding a requirement to coordinate the 8-step decision making process with any public engagement process associated with environmental justice, where project planners are also engaging stakeholders. This is consistent with the policy goals of Executive Order 14096, “Revitalizing Our Nation's Commitment

to Environmental Justice.”
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HUD intends to issue updated guidance on advancing environmental justice.

32
E.O. 14096 builds on and supplements prior E.O.s.
See
88 FR 25,251 (Apr. 26, 2023),
https://www.federalregister.gov/documents/2023/04/26/2023-08955/revitalizing-our-nations-commitment-to-environmental-justice-for-all.

L. Elevation, Floodproofing, Minimization, and Restoration

In addition to the revisions to § 55.20 previously described, this final rule significantly expands Step 5 in § 55.20(e) to implement FFRMS. Section 55.20(e) of the final rule provides that, in addition to the current mitigation and risk reduction requirements, all new construction and substantial improvement actions in the FFRMS floodplain subject to the 8-step decision making process must be elevated or, in certain cases, floodproofed above the FFRMS floodplain. If higher elevations, setbacks, or other floodplain management measures are required by State, Tribal, or locally adopted code or standards, HUD will require that those higher standards apply. The revised § 55.20(e) also provides more specific instruction on minimization and floodplain restoration measures, which are a key component of increasing flood resilience and must be considered in the 8-step decision making process.

For non-critical actions that are non-residential structures or multifamily residential structures that have no residential dwelling units below the FFRMS floodplain, through § 55.20(e)(1)(ii) of this final rule, new construction and substantial improvement projects may, as an alternative to being elevated above the FFRMS floodplain, be designed and constructed such that, below the FFRMS floodplain, the structure is floodproofed. Except for changing “base flood level” to “FFRMS floodplain,” as defined in § 55.7, this final rule adopts FEMA's requirements for floodproofing as provided in FEMA's regulations at 44 CFR 60.3(c)(3)(ii) and 60.3(c)(4)(i). In summary, all substantially rehabilitated or newly constructed structures within the FFRMS floodplain which are not elevated must be floodproofed consistent with the latest FEMA standards at or above the level of the FFRMS floodplain. This provision permits owners of non-residential and certain residential buildings to construct structures in a way that is less expensive than elevating but allows the buildings to withstand flooding, thus appropriately balancing property protection with costs and reflecting the lower risk to human life and safety in non-residential structures or parts of structures.

In the case of residential buildings, § 55.20(e)(1) of this final rule provides that the term “lowest floor” must be applied consistent with FEMA regulations in 44 CFR 59.1, FEMA's Elevation Certificate guidance, or FEMA's current guidance that establishes lowest floor.

Through this final rule, § 55.20(e)(2) identifies specific strategies that can reduce flood risk and loss of beneficial values of floodplains and wetlands, including green infrastructure, reconfiguration of the project footprint, and incorporation of resilient buildings standards. These strategies are based on floodplain and stormwater management best practices and HUD experience. Based on requests for technical assistance in this area, HUD believes the inclusion of recommended minimization measures will assist persons engaged in an 8-step decision making process.

This final rule also adds a new § 55.20(e)(3) to describe more clearly what is meant by restoration and preservation of wetlands or beneficial functions of the floodplain. Floodplain preservation is a concept that has been used in 24 CFR part 55 implementation historically but has been defined primarily through guidance, and this clarification is based on past practice and the successful incorporation of these measures in HUD-assisted projects.

Finally, this final rule replaces the current § 55.20(e)(3), which defines mitigation measures specific to critical actions, with a new § 55.20(e)(4). Section 55.20(e)(4) establishes mandatory actions to plan ahead for residents' safety in multifamily residential properties, healthcare facilities, and critical actions.

M. Processing for Existing Nonconforming Sites

This final rule creates a new § 55.21, “Alternate processing for existing nonconforming sites,” to address concerns about existing sites with onsite floodways. This section creates a special approval process for improvements to existing HUD-assisted or HUD-insured properties with onsite floodways under the following circumstances, summarized as:

1. HUD completes an 8-step decision making process and environmental review pursuant to part 50 and mandates measures to reduce flood risk and ensure that there are no other environmental risks or hazards at the site;

2. Specific measures will be taken to minimize flood risk and improve overall resilience at the site, including removing all residential units and critical action structures from the floodway; and

3. HUD determines that the HUD assistance cannot be practicably transferred to a safer site.

The purpose of this section is to establish a means of continuing HUD assistance or financing in exceptional circumstances to existing HUD-assisted or HUD-financed projects (
e.g.,
properties receiving assistance through Public Housing, Section 8 Project-based Rental Assistance, or subject to a HUD-insured mortgage) that would otherwise be unable to comply with part 55 due to the presence of an on-site floodway. This section should be applied only in very rare cases and is not intended to eliminate the general prohibition on providing HUD assistance for projects within floodways. However, HUD recognizes that there are circumstances in which terminating HUD assistance would not improve residents' overall resilience or safety in the context of HUD's mission. In such cases, HUD will closely review the site and determine whether the best option to improve flood resilience would be financing improvements at the existing site or rejecting HUD assistance at the site. The Assistant Secretary for Community Planning and Development has the authority to approve a project after HUD has met all of the conditions above.

N. Other Changes to Part 55

This final rule makes various other changes to part 55 to update terminology and references and restructures part 55 for readability and accuracy. Additionally, this final rule removes various provisions codified in part 55 that are outdated or underutilized.

The final rule removes § 55.24, “Aggregation,” because this provision is redundant with aggregation principles described more clearly in 24 CFR parts 50 and 58, which also apply to projects processed under 24 CFR part 55.

The final rule also removes the current § 55.25, “Areawide compliance.” Areawide decision making described in this section requires a complex notification process involving publications, and HUD has no record of the provision's use in a HUD-assisted activity since the promulgation of 24 CFR part 55. This provision is unnecessary because HUD has well-established procedures for tiering of environmental review records that similarly facilitate compliance with part

55 across a geographic area without relying on § 55.25.

The final rule relocates instructions on documenting 24 CFR part 55 decision making in the HUD environmental review record from § 55.27 to § 55.6 so that the instructions appear in context with general instructions on compliance with 24 CFR part 55 and a description of its structure. Additionally, the final rule revises the documentation requirements for consideration of alternatives to the proposed action to remove the requirement to compile a list of alternative properties in the local market. This information may be unavailable for some project types or not relevant to consideration of viable alternatives to achieve the goals of the decision making process within a given HUD program context.

The final rule removes § 55.28, which, in concept, provides relief from five of the eight steps in the wetlands decision making process when a permit has been secured from the United States Army Corps of Engineers (USACE) under Section 404 of the Clean Water Act for a proposed HUD-assisted construction activity in a jurisdictional wetland outside of the floodplain. The final rule removes this section because practitioners have not historically found it useful, and part 55 already contains another section that offers similar relief from the 8-step decision making process where USACE (or any other Federal agency) has already completed the 8-step decision making process for the same action. Section 55.26, which the final rule retains with revisions, allows HUD or responsible entities to adopt another agency or responsible entity's 8-step decision making process under conditions that are less restrictive than those in § 55.28, which apply to decision making under E.O. 11988 or E.O. 11990 carried out by USACE.

O. Minimum Property Standards

This final rule applies a new elevation standard to one-to-four-family residential structures with mortgages insured by FHA. Generally, in HUD's single family mortgage insurance programs, Direct Endorsement mortgagees submit applications for mortgage insurance to HUD, and Lender Insurance mortgagees endorse loans for insurance after the structure has been built. Thus, there is no HUD review or approval before the completion of construction. In these instances, HUD is not undertaking, financing, or assisting construction or improvements. Thus, the FHA single family mortgage insurance program is not subject to review under E.O. 11988, NEPA, or related environmental laws or authorities. However, newly constructed single family properties in HUD's mortgage insurance programs are generally required to meet HUD's Minimum Property Standards under 24 CFR 200.926 through 200.926e. These property standards require that when HUD insures a mortgage on a property, the property meets basic livability and safety standards and is code compliant. The section relating to construction in flood hazard areas, § 200.926d(c)(4), has long been included as a property standard.

In alignment with the revisions in this final rule that address FFRMS under E.O. 11988, this final rule also amends the Minimum Property Standards on site design, specifically the standards addressing drainage and flood hazard exposure at § 200.926d(c)(4). The purpose of the amendment of the property standards is to decrease potential damage from floods, increase the safety and soundness of the property for residents, and provide for more resilient communities in flood hazard areas. The final rule revises § 200.926d(c)(4) by requiring the lowest floor (including basements and other permanent enclosures) of newly constructed dwellings, within the 1-percent-annual-chance floodplain, to be at least 2 feet above the base flood elevation as determined by best available information. For one- to four-unit housing under HUD's mortgage insurance and low-rent public housing programs, HUD's Minimum Property Standards in 24 CFR part 200 currently require that a one- to four-unit property involving new construction, located in the 1 percent-annual-chance floodplain in the effective FIRM, be elevated to the effective FIRM base flood elevation. This final rule adds two feet of additional elevation to the base flood elevation as a resilience standard and applies this standard only to new construction of such properties and not to substantial improvement. This final rule does not require consideration of the horizontally expanded FFRMS floodplain for single family mortgage insurance projects governed by the requirements in the Minimum Property Standards.

P. Categorical Exclusion

This final rule amends § 50.20(a)(2)(i) to revise the categorical exclusion from further environmental review under NEPA for minor rehabilitation of one- to four-unit residential properties. Specifically, this final rule removes the qualification that the footprint of the structure may not be increased in a floodplain or wetland when HUD performs the review. In 2013, HUD removed the footprint trigger from the corresponding categorical exclusion at § 58.35(a)(3)(i) for rehabilitations reviewed by responsible entities. This change makes the review standard the same regardless of whether HUD or a responsible entity is performing the review. Moreover, when HUD performs a review under 24 CFR part 50, the categorical exclusion in § 50.20(a)(3) applies to construction, but not rehabilitation, of up to four units in a floodplain or wetland as an individual action such that an environmental assessment or environmental impact statement is normally not required. Rehabilitated structures in a floodplain or wetland with an increased footprint currently require an environmental assessment or environmental impact statement.
33

It is logically inconsistent to require a greater review for minor rehabilitations than new construction. Similarly, it is logically inconsistent to apply a higher level of review for HUD as opposed to grantees because the proposed actions would be the same regardless of review authority under 24 CFR part 50 or part 58.

33

See
§ 50.20(a)(3)(iii).

Actions under this revised categorical exclusion remain subject to E.O. 11988, E.O. 11990, and part 55, and any impact resulting from an increased footprint in a floodplain or wetland will be fully addressed by the 8-step decision making process in part 55.

Q. Permitting Online Posting

This final rule updates §§ 50.23, 58.43, 58.45, and 58.59 to allow public notices to be posted on an appropriate government website as an alternative to publication in local news media if the appropriate government website is accessible to individuals with disabilities and provides meaningful access to individuals with Limited English Proficiency. This change makes parts 50 and 58 consistent with revised § 55.20, which allows public notices required as part of the 8-step decision making process to be posted on a government website instead of in a newspaper.

R. Severability

This final rule incorporates a new severability provision in a new subpart D, at § 55.30. As described in § 55.30, it is HUD's intent that each provision of this final rule has effect to its fullest extent permitted by law, including by ensuring the severability of any provision affected by a judicial order. Should a court find any specific portion of this final rule unenforceable, the

remainder of this final rule and its application should remain effective to the fullest extent permitted by law. Those portions that are unaffected by any judicial ruling can be implemented by HUD without a new rulemaking simply to promulgate provisions that are not subject to a court ruling. For example, this final rule revises standards in both 24 CFR parts 55 and 200. The administration and workability of each part are independent; and so, severing a portion of the revision to one part would not affect the administration and workability of the revisions in the other part. Similarly, severing one program from the application of this final rule would not affect the administration and workability of its application to other HUD programs. As another example, severing one approach for identifying the FFRMS floodplain described in § 55.7 would not affect the validity and administration of the remainder of § 55.7, nor the remaining portions of this final rule.

S. Tribal Consultation and Stakeholder Listening Sessions

HUD's Government-to-Government Tribal Consultation Policy calls for consultation with Tribal Nations and Tribal Leaders early in the rulemaking process on matters that have Tribal implications. Accordingly, on June 10, 2021, HUD sent letters to all eligible funding recipients under the Native American Housing Assistance and Self Determination Act of 1996 (NAHASDA) and their tribally designated housing entities informing them of the nature of the forthcoming rule and soliciting comments. This letter announced a 30-day comment period and a webinar and conference call consultation session regarding the forthcoming rule. On August 18, 2021, HUD sent a second letter with a 60-day comment period to review an early draft of the proposed regulatory changes. During this period, HUD held an additional consultation session via webinar and conference call. This letter was posted on Codetalk, the HUD Office of Native American Programs' website, along with an early outline of the rule. During this draft review period, HUD received one written comment, suggesting that HUD explicitly recognize the right to Tribal self-governance in part 55. HUD acknowledges the sovereignty of federally recognized American Indian and Alaska Native Tribes and is committed to operate within a Government-to-Government relationship to allow Tribes the maximum amount of responsibility for administering their housing programs. Tribes had the opportunity to comment on this rule at the proposed rule stage.

During the comment period of the proposed rule, HUD engaged in additional stakeholder outreach through four live listening sessions held April 17, 2023, May 2, 2023, May 4, 2023, and May 15, 2023. While all sessions were free and open to the public, local government officials, Tribal representatives, housing industry representatives, and the general public each had a session targeted towards their respective organizations or groups. These sessions were intended as informative listening sessions in which HUD provided an overview of the proposed rule and an opportunity for members of the public to comment. Notes from the listening sessions can be found at
https://www.hud.gov/program_offices/comm_planning/environment_energy/ffrms.

T. Delayed Compliance Date

This final rule has an effective date of
May 23, 2024;
however, required compliance with this final rule is delayed until June 24, 2024, except: compliance with this final rule's amendments to 24 CFR part 200 is required for new construction where building permit applications are submitted on or after January 1, 2025; and compliance with this final rule's amendments to 24 CFR part 55 is required no later than January 1, 2025 for the following programs: (1) Programs subject to chapter 9 of the MAP Guide (Multifamily FHA, Section 202 and 811 capital advance grants, transfers under Section 8(bb) of the United States Housing Act and Section 209 of HUD's annual appropriations (or subsequent provisions), Section 8 Renewals with Capital Repairs, RAD conversions to PBRA, and Green and Resilient Retrofit Program); and (2) The other mortgage insurance programs subject to part 55 (FHA Healthcare and FHA Risk Share).

After reviewing public comments, HUD has determined, in certain instances, to provide a delayed compliance period to allow entities regulated by this rule a grace period to come into compliance with the revised requirements. As described, compliance with the amendments to part 200 of this rule is required for new construction where building permit applications are submitted on or after January 1, 2025. This delay is intended to provide home builders ample opportunity to adapt and prepare for the requirements of this rule, including the increased elevation standards. Setting a delayed compliance period for the amended requirements for part 200 is appropriate to address public comments received expressing concern that the rule could limit the availability of single family affordable housing. Applications for single family FHA insurance are submitted to HUD after housing construction is completed. As a result, for new construction located in Special Flood Hazard Areas, applications submitted to HUD following implementation of this rule will be rejected if they do not meet the elevation requirements in the Minimum Property Standards. HUD is extending the compliance date for the part 200 revisions to allow time for housing developers to incorporate the new Minimum Property Standards into the planning process for new construction.

Similarly, after reviewing public comments, HUD has determined to provide a delayed compliance period until January 1, 2025, for entities to come into compliance with the revisions this final rule makes to part 55 for the following programs: (1) Programs subject to chapter 9 of the MAP Guide (Multifamily FHA, Section 202 and 811 capital advance grants, transfers under Section 8(bb) and under Section 209 of HUD's annual appropriations (or subsequent provisions), Section 8 Renewals with Capital Repairs, RAD conversions to PBRA, and the Green and Resilient Retrofit Program); and (2) The other mortgage insurance programs subject to part 55 (FHA Healthcare and FHA Risk Share). Setting a delayed compliance period for the revised part 55 is appropriate for these programs to account for the extensive lead time required for site design, planning, and environmental analysis, all of which are required prior to submitting an application for FHA mortgage insurance. Many mortgage insurance projects include large-scale development that requires significant time and monetary investment in planning initiatives, thereby requiring a longer compliance period to incorporate part 55 revisions into the planning process. Additional programs subject to the MAP Guide have similar project planning timelines. The delayed compliance period poses limited increased flood risk for these programs in the interim because the MAP Guide currently requires elevation to BFE +2 feet for new construction, which is one of the methods for defining the FFRMS floodplain under this rule.

III. Changes at the Final Rule Stage

In response to comments received during the proposed rule stage of this rulemaking, HUD is making several revisions to the final rule:

Part 50 (Authority).
The final rule revises the authority section at the beginning of part 50 to update the

authority of “42 U.S.C. 4321-4335” to “42 U.S.C. 4321-4336e.” This change to the citation to NEPA is appropriate because the Fiscal Responsibility Act of 2023 (Pub. L. 118-5) added additional sections to NEPA.

Part 55 (Authority).
The final rule revises the authority section at the beginning of part 55 to add the authority 42 U.S.C. 4321
et seq.
This change to include NEPA is appropriate because NEPA requires the Federal government to act as a “trustee of the environment” for future generations.

Section 55.2.
In § 55.2(b)(12), the final rule, in paragraphs (i)(A) and (i)(B), clarifies that the repair, reconstruction, modernization, or improvement of a structure includes a manufactured housing unit. In § 55.2(b)(13), the final rule also removes the non-exhaustive list of examples of what does not constitute a wetland because it is not necessary to list things that the definition does not cover and in order to avoid confusion about certain areas around deep water aquatic habitats that may be considered wetlands.

Section 55.4.
In § 55.4(b), the final rule adds the term “HUD-acquired” to the list of property types to clarify that properties that had been previously insured by HUD and were then acquired by HUD through default are also subject to the requirements for notification to renters when a property is in a floodplain.

Section 55.6a.
The final rule adds a new section regarding severability at § 55.6a, which describes that any portion of this rule found to be unlawful shall be severable from this rule and the remainder of the part shall continue to remain effective.

Section 55.7.
The final rule adds language to § 55.7(b)(1) and (c)(1) to clarify when HUD considers data to be available and actionable to define the FFRMS floodplain using CISA. The final rule also adds language to 55.7(e) to clarify that CISA must be used for EIS level projects where available and actionable data exists or can be generated. Additionally, the final rule adds language to § 55.7(f) to clarify that HUD and responsible entities may utilize local tools to implement CISA on a voluntary basis, as long as the resulting elevation is at least as high as the lowest of (1) the 0.2-percent-annual-chance flood elevation; (2) the elevation that results from adding an additional two feet to the base flood elevation; or (3) the elevation required by paragraphs (b) or (c) of § 55.7, if CISA data is available and actionable under paragraphs (b)(1) or (c)(1). The final rule also permits the voluntary use of any particular tool, resource, or other process that defines the floodplain using CISA that HUD identifies through guidance.

Section 55.8.
In § 55.8(a)(1)(ii), the final rule expands the scope of activities allowed in the FFRMS floodplain where there is a floodway onsite to include rehabilitation that does not expand the footprint of existing buildings or the number of units on the site. In § 55.8(a)(1)(ii)(B), HUD removed specific examples of de minimis improvements from the rule. HUD intends to provide more detailed guidance on de minimis improvements to ensure that only compliant work is allowable under this part. In § 55.8(a)(2), the final rule clarifies that certain critical actions may be located in the floodway if they are functionally dependent and any existing or new structure has been or will be elevated or floodproofed to the FFRMS elevation for critical actions; and that certain critical actions may be located in a coastal high hazard area or LiMWA if they are functionally dependent and meet FEMA's mitigation requirements for such actions located in the coastal high hazard area. This section also clarifies that for critical actions, mortgage insurance on a property containing a floodway may be exempt from the prohibition in § 55.8(a)(2) if there are no structures or improvements located in the floodway, and subject instead to § 55.8(a)(1).

Section 55.9.
In § 55.9(a), the final rule makes minimal changes to align the text of § 55.9(a) with § 55.10.

Section 55.10.
In § 55.10(a), the final rule clarifies, through an added example, that new construction activities for a proposed project include related activities for any structures or facilities including the siting of new manufactured housing units.

Section 55.12.
The final rule excludes the proposed § 55.12(g)(3) so as to avoid duplication and to better align with both existing processes and new incidental floodway provisions.

Section 55.13.
In § 55.13(e), the final rule clarifies that the exception to § 55.20 applies to financial assistance to lease an existing structure and/or units within an existing structure, adds paragraph (e)(3), which was unintentionally omitted from the proposed rule and aligns with existing regulatory language, and specifies in paragraph (e)(3) that the structure should be insured to the maximum extent available under the NFIP. In § 55.13(f), the final rule clarifies that the exception applies to special projects for the purpose of improving the “energy or water efficiency” of utilities rather than the “efficiency” of utilities. The final rule excludes the proposed 55.13(g) exemption to avoid unnecessary duplication. HUD determined that both the Section 184 Indian Housing loan guarantee program and the Section 184A Native Hawaiian Housing loan guarantee program meet the categorical exclusion at 24 CFR 50.19(b)(17), which is already exempt from part 55 under § 55.12(b).

Section 55.16.
In Table 1 to § 55.16, the final rule clarifies that certain critical actions may be located in the floodway, coastal high hazard area, and LiMWA, if they meet the requirements for critical actions in § 55.8.

Section 55.20.
The final rule adds a new paragraph (e)(2)(iv) to § 55.20 to clarify that, if applicable, minimization techniques include identifying and incorporating FEMA identified Severe Repetitive Loss mitigation as outlined in § 55.8(c). The final rule also makes minimal changes to § 55.20(a) to align the language with § 55.10. The final rule also adds nature-based approaches as an alternative method for avoiding impacts to wetlands and floodplains in § 55.20(c)(1)(ii). Additionally, the final rule makes other changes to eliminate redundant language.

Section 55.21.
The final rule revises the layout of § 55.21(b) to improve readability. Additionally, § 55.21(b) adds minimum requirements for proposed projects to meaningfully reduce flood risk and increase the overall resilience of the site, including a No-Rise Certification for any new improvements in the floodway.

Section 55.30.
The final rule adds a new section regarding severability at § 55.30, which describes that any portion of this rule found to be unlawful shall be severable from this rule and the remainder of the part shall continue to remain effective.

Part 58 (Authority).
The final rule revises the authority section at the beginning of part 58 to update the authority of “42 U.S.C. 4321-4335” to “42 U.S.C. 4321-4336e.” This change to the citation to NEPA is appropriate because the Fiscal Responsibility Act of 2023 (Pub. L. 118-5) added additional sections to NEPA.

Section 200.926.
The final rule removes the proposed revision to § 200.926(a) that would have applied the elevation standard in § 200.926d(c)(4)(i) through (iii) to substantial improvement activities. In response to public comments received, HUD determined to not include the proposed change to § 200.926(a) in the final rule to avoid creating adverse impacts on homeowners renovating their existing single family homes in low-cost areas.

Section 200.926d.
The final rule does not apply § 200.926d elevation requirements to substantial improvement activities. The final rule also clarifies that for the elevation certificate required by § 200.926d(c)(4)(iii), HUD's elevation standard for newly erected manufactured housing is the standard required in 24 CFR 203.43f or 24 CFR part 3285, as applicable, rather than two feet above base flood elevation.

IV. Public Comments

This public comments section contains a summary of the public comments that HUD received in response to the proposed rule.

Specific Questions for Comment From the Proposed Rule

In section III.Q of the proposed rule, HUD included several specific questions for public comment. Those specific questions from the proposed rule and public comments received in response to those specific questions are summarized here, along with HUD's responses to the public comments received.

A. Question #1: Whether To Prioritize an Alternative Method Among the Three Approaches To Define the FFRMS Floodplain

1. General Support for the Proposed CISA Approach

Several commenters generally expressed support for HUD's goals outlined in the proposed rule, such as protecting safety, health and welfare, preserving natural floodplains, considering environmental justice impacts, preventing the significant impact of flooding on underserved communities, and more accurately measuring flood risk. One commenter emphasized that it was HUD's fiscal obligation to regulate the FFRMS floodplain using CISA to reduce the Federal government's fiscal exposure to climate change. Another commenter strongly supported HUD's assessment to subject more of the floodplain area to the 8-step decision making process and encouraged HUD to solidify the basic purpose and guidance in 24 CFR 55.1(a)(5) of the proposed rule. The commenter emphasized the importance of HUD's commitment because flooding—even inland flooding—is becoming more frequent across the U.S. coastline, due to climate change, no matter how it is measured.

Several commenters expressed support for the three-tiered approach for defining the FFRMS floodplain outlined in the proposed rule. These commenters also agreed that CISA should remain the primary method for determining the FFRMS floodplain. Commenters noted a preference for CISA because it is forward-looking, acknowledges ongoing advances in climate science, is more dynamic, and provides a more complete picture of flood risk over the lifetime of a project.

Several commenters also expressed their support for HUD's proposal to utilize the 0.2-Percent-Annual-Chance Flood Approach and the Freeboard Value Approach when CISA maps and analyses are not available. One commenter noted that where CISA floodplains cannot be implemented in the short- and medium-term, it is important to rely on proven standards that will give stakeholders tools that are well-understood and widely available.

Another commenter agreed with HUD that FEMA flood maps are often out of date and cited the White House Flood Resilience Interagency Working Group's Federal Flood Risk Management Standard CISA State of the Science Report in noting that the maps reflect that efforts to prioritize modernizing and implementing the NFIP are overdue. This commenter believed that the latest science on flood risk hazards demonstrates that there is sufficient data to regulate the FFRMS based on climate science and that it is critical the Federal government do so when the data are available in order to prevent risky planning and investment decisions.

One commenter emphasized that they support HUD's CISA-centered approach because it is likely that FEMA's 1-percent-annual-chance flood hazard measurements underestimate the number of assisted housing units within those areas. This commenter encouraged HUD to use CISA to the maximum extent possible. Another commenter agreed that continuing to use the 1-percent-annual-chance or even the 0.2-percent-annual-chance floodplain in place of CISA is irresponsible especially given HUD's mission of serving low-income families who are particularly ill-equipped to recover from flood-related hardships.

One commenter supported HUD's three-tiered approach prioritizing CISA, and added that since flood elevations are not static, a cautionary statement of reviewing the characteristics of flooding (velocity, debris, and flashiness) should also be considered for all proposals. Another commenter emphasized that no matter what approach was ultimately taken, it is important to streamline the FFRMS floodplain determination process and limit room for conjecture.

One commenter urged HUD to go further in its rule by requiring the evaluation of potential flooding throughout the design lifetime of structures using the best available risk modeling and science. This commenter said HUD should require project plans to account for expected flood heights and other mitigation measures. Another commenter requested HUD consider at minimum a 50-year projection for CISA and suggested HUD project larger floodplains because of the time necessary for climate instability to manifest. Another commenter recommended HUD use the same lower level of risk tolerance for critical and non-critical actions, arguing that the Federal government has a moral imperative to safeguard new and updated affordable housing by ensuring affordable housing can withstand climate change.

Several commenters asked HUD to incorporate some clarity in its final rule surrounding the meaning of “anticipated life of the project.” One commenter noted that it is not unusual for projects to extend beyond their anticipated life for years or even decades and that a project's extended life could impact the elevation for which they should be designed. Another commenter asked that HUD require CISA criteria to be extended over the entire life of a project—a minimum of 50 years, which is the length of time used for most building life cycle assessments.

HUD Response:
HUD appreciates the support from commenters for HUD's goals outlined in the proposed rule. HUD disagrees that it is our fiscal obligation to regulate using CISA; however, we agree that it should be used as the preferred approach where data is available and actionable. HUD developed the three-tiered approach to defining the FFRMS floodplain with the intent to be more forward-looking and acknowledge that being flexible is necessary as science advances to best achieve the outlined goals. HUD appreciates commenters' feedback regarding the use of a multi-tiered approach and the importance of using proven standards when CISA is unavailable. HUD also appreciates the commenters' support that a wider floodplain area be considered in the 8-step decision making process, though HUD disagrees that this needs to be stated in 24 CFR 55.1(a)(5) because HUD considers the existing language sufficient and effective.

HUD also appreciates the commenters' considerations that FEMA FIRMs are static and based on a snapshot of data in time. HUD believes that its preferred approach, CISA, provides a significant advantage to provide future flood risk management.

HUD intends to publish guidance to help grantees choose appropriate design life horizons to utilize CISA effectively. The goal is for the chosen design life to protect the Federal investment throughout the anticipated life of the project without overly burdening projects with unreasonable elevation requirements. HUD notes that critical actions are given additional mitigation requirements as per the instructions in the Guidelines which ask Federal agencies to use higher standards for critical actions due to their more sensitive nature. This higher standard was considered too economically burdensome to impose on all projects with lower inherent risk, so it was not imposed for all activities. HUD intends that this rule will help protect Federal investments against future flood risk.

2. Concerns Regarding the Proposed CISA Approach

Several commenters also wrote in with concerns about HUD's approach for defining the FFRMS floodplain in its proposed rule.

a. Burden and Uncertainty

One commenter stated that the three-tiered definition of FFRMS floodplain was too confusing and burdensome. This commenter noted that establishing whether an action was in a floodplain or not is a critical first step in HUD's regulatory process given that if the action does occur in a floodplain, additional analysis and mitigation requirements are triggered. The commenter went on to say that without established floodplain maps, stakeholders will have a difficult time completing this first step and these material unknowns and uncertainties will generate increased project delays, increased project costs, and increased project cancelations—all at the expense of much-needed housing.

One commenter was specifically concerned with the horizontal floodplain definition. The commenter stated that FEMA's FIRMs are well-established and have clearly depicted the 1-percent-annual-chance floodplain in most communities across the Nation to the extent that many Federal, State, and local regulations are tied to the 1-percent-annual-chance floodplain. FEMA's maps regularly provide certainty to property owners to know when and where they must comply with a multitude of rules, codes, ordinances, and grant conditions.

HUD Response:
HUD appreciates the commenters' feedback regarding the potential complexity of the tiered approach outlined in the proposed rule. As described earlier in this preamble in section II.B., the tiered approach to defining the FFRMS floodplain provides sufficient direction to grantees and applicants on how to determine if a project is located in the FFRMS floodplain based on data availability. Moreover, HUD intends to roll out ample training and technical assistance with this rule to ensure that grantees are well prepared to execute compliant environmental reviews. With training and assistance, HUD is confident that grantees will be able to navigate the process and avoid unnecessary negative effects on project timelines. This training will also help grantees work with their builders and avoid uncertainty associated with projects located in the FFRMS floodplain.

b. Local Data

Several commenters noted that some communities lack local, State, or Federal elevation data to establish the FFRMS floodplain with any of the three methods outlined in the proposed rule. These commenters suggested that this lack of available data could discourage developers and disproportionately impact rural communities that already have a lack of affordable housing. One commenter noted specifically that professional surveyors will not generally provide the 0.2-percent-annual-chance flood elevation without a formal flood study, which is not only very expensive but is also time-consuming. This commenter urged HUD to consider an alternative elevation for use in these circumstances. Another commenter also noted the expense of land surveys and the resulting decrease in housing that may result.

Conversely, one commenter noted they have created their own mapping tools to evaluate flood risk. This commenter is hoping to be able to continue using their tools and would like HUD to provide an approval process for using them. This commenter reiterated that one of HUD's stated goals is to better align with local standards that have already been strengthened and to take “a flexible approach to adapt to the needs of . . . the local community.” Commenters asked HUD to provide up to date maps and data to local communities and asked HUD to model FFRMS requirements after local codes.

One commenter hoped the FFRMS rule would encourage partnerships at all levels of government to adopt floodplain management policies. Another commenter suggested that HUD collaborate with state-level data providers to ensure that local data products meet CISA requirements and receive HUD approval. One commenter used the fact that many localities have made significant investments in “down-scaled” mapping of future flood risk as evidence that the availability of technically credible data on future flood risks has developed significantly since HUD's last proposed rule.

Another commenter urged HUD to incorporate local data that considers climate change by considering flood risk information available in each State's Hazard Mitigation Plan.

HUD Response:
HUD appreciates the commenter's concerns regarding the availability of data in some communities. HUD understands that there are existing data limitations in some communities, particularly in rural areas, where FEMA mapping is unavailable. This rule does not change the current process and allows communities to utilize flood and elevation studies or best available data, including anything relevant from hazard mitigation plans, to proceed with their floodplain determination. Therefore, where FEMA FIRMs are not available, this rule has no impact on the current part 55 process to utilize best available information and would not have major cost impacts in those areas. The Regulatory Impact Analysis (RIA) did not offer evidence that the cost of surveys would have a significant impact on housing supply. Given the diversity of geography and data for HUD projects, HUD cannot set a standardized baseline elevation for all projects and instead must rely on a project-by-project approach.

As described earlier in this preamble, HUD appreciates that some State, Tribal, and local governments have created CISA tools capable of determining the extent of the FFRMS floodplain in their respective jurisdictions. As such, HUD has adjusted the language of this rule to voluntarily permit the use of local tools where they result in an elevation at least as high as the lowest of (1) the 0.2-percent-annual-chance floodplain elevation; (2) the elevation that results from adding an additional two feet to the base flood elevation or (3) the elevation required by paragraph (b) or (c) of § 55.7, if CISA data is available and actionable under paragraphs (b)(1) or (c)(1). While HUD will not model the FFRMS floodplain around local code requirements because it would lead to uneven protection standards nationwide, this change will better recognize the efforts many localities have made to address their own climate risks.

As part of the White House Flood Resilience Interagency Working Group helping to develop CISA tools nationwide, HUD appreciates the sentiment of commenters who wish to

encourage intergovernmental partnerships to adopt floodplain risk management policies. HUD relies on the Federal science agencies like FEMA and NOAA to work with their local partners to obtain accurate local flood risk data for use in their development of tools which may be used to implement CISA, as well as other FFRMS approaches. HUD is also open to coordinating with state-level providers on a project-specific basis as needed.

c. Federal CISA Implementation Tools

Several commenters agreed that, though they support forward-looking risk projections that consider climate change, it is premature to rely on CISA maps with national coverage, which may take years to develop. One commenter suggested that without stakeholder approval and practical application of tools, any proposed higher elevation requirements may be too severe and result in unintended, adverse consequences. Another commenter noted the opposite concern, that while CISA maps are being developed, older maps will need to be relied upon, which are insufficient. This commenter also noted that no funding is attached to HUD's proposed rulemaking.

One commenter stated that because a BFE based on CISA data cannot be used if the elevation is lower than the current FIRM or FIS and because there may be other environmental disclosure rules regarding climate flooding risk, this multilayered approach, reliant on maps that are not yet available, would create an impractical and untenable level of uncertainty for builders and developers. The commenter urged HUD to withdraw the proposed rule until maps of the floodplains were available and to release a CISA tool for public comment on the data, methodology, functionality, accuracy, and user friendliness of the model before it is implemented. The commenter also recommended the rule be subject to peer-review. If not, they predicted builders would have to do a lot of research and expend resources trying to determine if they were in a floodplain.

One commenter emphasized the complexity of developing a CISA mapping tool and recommended that HUD provide additional clarification on what process it will use to approve maps developed using CISA. The commenter suggested that this proposed rule should have focused more on the development of the mapping tool, and HUD may need to issue a separate notice seeking comment from the public on the tool's development given the complexity of the development process. Specifically, the commenter recommends HUD seek input from stakeholders and industry participants, as their input is critical for the tool's eventual success.

Several other commenters also requested the opportunity to provide feedback on CISA maps. One commenter noted that they would like to provide further comment on a focused handful of HUD's actionable modeling criteria. Other commenters asked whether CISA maps would be available for stakeholders to identify the FFRMS floodplains and whether HUD would require approval for a process that would result in FFRMS floodplain boundaries different than what a user would generate using CISA mapping. These commenters also asked who would approve CISA maps and by what process and what qualifications HUD's approver would have to determine the CISA maps' sufficiency.

Another commenter noted that it is critical for HUD to define the specific circumstances in which it will approve CISA maps. While the commenter stated that might be best done in guidance, they emphasized that HUD's final rule must define some “high-level guardrails” as well. The commenter suggested the following guardrails: (1) all maps must, at a minimum, be consistent with current CISA guidelines issued by the Water Resources Council,
34

National Climate Task Force, or equivalent Federal authority and (2) HUD should state clearly that it reserves the authority to deny or revoke approval of CISA maps for any reason.

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HUD notes that these CISA guidelines are the same Guidelines discussed in the Background section of this preamble, available at
https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf.

Other commenters agreed that the proposed rule cannot be fully evaluated without CISA mapping being available for review and that it should not be implemented before the public can review the CISA mapping tools and provide comments. One commenter asked when the tools would be available to make nationwide determinations. Other commenters asked whether there will be a process for the public to refute the CISA maps.

One commenter emphasized the need to analyze granular property-specific data, including structure-specific identifications, first-floor height (FFH) assessments, and 1-meter digital elevation model data, in order to develop a reliable flood risk model. This commenter recommended that HUD use its co-chair position on the National Climate Task Force's FFRMS Science Subgroup to advocate for the addition of `granular' as a necessary characteristic for “best available data and science.”

One commenter requested that HUD develop its CISA maps with the following in mind to ensure they are developed properly: use currently established catastrophe models that have been recognized by State agencies and insurance commissions; do not extrapolate results; do not downscale data except through dynamic downscaling; do not rely on steady-state assumptions of the future; and display information on uncertainty and provide understandable outputs. The commenter emphasized that adoption by standard-setting organizations demonstrates model reliability as does peer-review. To that end, the commenter asked HUD to clarify what standard of peer-review would be effective and to follow up to confirm this standard has been met.

One commenter asked if CISA flood risk areas would be publicly available online. This commenter encouraged the development of a singular, publicly available website that reflects FFRMS approved methodologies.

Several commenters expressed concern about how HUD's CISA maps will be kept up to date. Commenters noted that these forward-looking maps should be required to be updated regularly as more data becomes available. Another commenter asked whether there will be a budget to make sure the CISA tool remains up to date.

One commenter requested HUD rename CISA to CISA-F to avoid confusion with another Federal tool called CISA for the Critical Infrastructure Act.

HUD Response:
As described earlier in this preamble in section II.B., CISA is the preferred approach to define the FFRMS floodplain and HUD intends to require use of CISA where data is available and actionable. HUD agrees that it is premature to rely entirely on the CISA standard which is why HUD proposed CISA as the preferred of three methodologies to define the FFRMS floodplain. HUD recognizes that CISA data is not currently available nationwide via a Federal CISA implementation tool and therefore HUD has adjusted the language of this rule to allow, but not require, the use of State, local, or Tribal CISA data if they are available and actionable, as defined in § 55.7. HUD notes that while it cannot make funding explicitly available for this rule as no congressional appropriation has been made available to do so, many HUD programs do allow funding to be used for mitigation activities such as elevation and flood resilience efforts.

HUD made the proposed rule available for both public comment and comment through interagency review. Through the proposed rule, the public had opportunity to comment on, for example, whether the FFRMS floodplain should be defined using CISA where data is available. HUD received numerous comments on utilizing CISA to determine the FFRMS floodplain and other topics. As discussed more thoroughly elsewhere in this final rule, the public also had opportunity to comment on the use of CISA outside of this rulemaking through the guidelines.

HUD intends to release subregulatory guidance to help communities better understand the CISA process and how they can use acceptable tools to map the FFRMS floodplain. While HUD will not be releasing any CISA maps of its own, HUD does intend to accept maps, tools, or resources developed through Federal or local CISA data, when that data is available and actionable, as long as those maps, tools, and resources meet the requirements outlined in § 55.7(b), (c), and (f).

HUD disagrees that the proposed rule could not be evaluated or reviewed without CISA mapping being available. The concept of CISA and associated data is well established, as outlined in the FFRMS, the Guidelines, and the White House State of the Science Report, for instance.
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The public has accordingly had opportunity to comment on CISA generally as well as its specific proposed use in topics addressed by this rule. The FFRMS and Guidelines, which were subject to public notice and comment, provided a method for considering CISA for coastal flood hazards that takes into account regional sea-level rise variability and service life of the project. Using CISA to define the FFRMS floodplain provides a forward-looking approach to flood risk management. Available and actionable CISA data is currently most readily available along the coasts in areas with the highest risk of flooding and, in accordance with E.O. 13690 and E.O. 11988, HUD is directed to utilize the best-available and actionable data to protect Federal investments. Where CISA data isn't available or actionable, HUD has provided additional acceptable processes to define the FFRMS floodplain including the 0.2-percent-annual-chance flood approach and the FVA.

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See
https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf.

HUD appreciates the commenter's thoughts regarding the need to analyze granular property-specific data and encourages grantees to utilize best-available data when complying with this rule. HUD notes that its outlined CISA approach for identifying the floodplain is consistent with the recommended approach from the Water Resources Council Guidelines.
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HUD notes that these CISA guidelines are the same Guidelines discussed in the Background section of this preamble, available at
https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf.

HUD disagrees that renaming CISA to CISA-F is necessary to avoid confusion and suggests that grantees use context to help differentiate between the acronyms.

d. 0.2-Annual-Chance-Flood Approach (500-Year Floodplain Approach)

Several commenters had concerns about limitations to the 0.2-percent-annual-chance flood approach. Several commenters pointed out that FEMA maps do not usually provide an elevation for the 0.2-percent-annual-chance floodplain. One commenter noted that FEMA does not regularly produce maps that incorporate wave modeling, which makes it difficult to plan projects and for residents to understand how regulations may impact their homes. This commenter encouraged HUD to work with FEMA to incorporate wave modeling in its 0.2-percent-annual-chance floodplain maps.

One commenter asked that HUD's final rule clearly define what 0.2-percent-annual-chance floodplain can be used, wondering whether its limits need to contain the structure, be within the subject property parcel, or be within 500 feet of the nearest structure. Several other commenters wondered what data would be used to determine the 0.2-percent-annual-chance floodplain.

One commenter asked if the addition of 2 or 3 feet to existing BFE to calculate a revised flood hazard area and flood elevation results in any changes to the extent of area considered seaward of the LiMWA. This commenter asked that the 0.2-percent-annual-chance flood method reflect the potential of the LiMWA to shift, as a result of sea level rise.

One commenter worried that the effects of using the 0.2-percent-annual-chance floodplain for properties with no known or previously occurring flood risk would reduce density and property values.

One commenter asked HUD to clarify if the 5/8-step process would be triggered by improvements in a 0.2-percent-annual-chance floodplain, and asked HUD to make the FFRMS guidance clear.

HUD Response:
HUD appreciates the commenter's feedback regarding the limitations of the 0.2-percent-annual-chance flood approach. When the FEMA-mapped 0.2-percent-annual-chance floodplain is unavailable, or when, for critical actions, the FVA approach is higher, HUD would allow the FVA to be utilized.

In coastal areas, actionably accurate wave models can be difficult and expensive for jurisdictions to obtain. HUD would generally agree with the commenter that including wave modeling in coastal area flood maps is beneficial to accurately depicting flood risk which is why the CISA method is preferred. HUD will continue to work with its Federal partners to support their efforts toward increasing availability of mapping and modeling in coastal areas so that the best available data may be utilized for HUD projects.

For the 0.2-percent-annual-chance flood approach with non-critical actions, the final rule requires that the FEMA-mapped 0.2-percent-annual-chance floodplain must be utilized to determine if the structure is within the floodplain of concern. Additional technical assistance and guidance will be released alongside the rule to help grantees and practitioners make appropriate determinations for their projects and help them understand when the 8-step decision making process is required. As the 0.2-percent-annual-chance floodplain is not based on climate informed data but on current FEMA mapping, it would therefore be unable to account for sea level rise over time. Additionally, HUD notes that the rule does not change the FEMA-defined Base Flood Elevation.

The RIA found no evidence that the 0.2-percent-annual-chance flood approach would reduce property values and HUD expects any density loss to be intentional based on the goal of reducing flood risk.

e. Freeboard Value Approach

Several commenters encouraged HUD to adopt the FVA as the primary approach for defining the FFRMS floodplain. Several commenters recommended use of the FVA over CISA because CISA mapping is not available for public review and the public has not been provided adequate information to assess its impacts and implications. One commenter suggested the NEPA process cannot be completed correctly using CISA maps. One commenter concluded that given the uncertainties, relying on the FVA would be most likely to ensure

reliable and consistently documented

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-06246. Public record. Not legal advice.