Episode 116: HUD Moves to Rescind FFRMS Flood Standards

HUD has proposed a rule to rescind the Federal Flood Risk Management Standard (FFRMS) final rule and its associated regulations, originally published in April 2024. The proposed rule would restore HUD's Part 55 floodplain management regulations to their pre-April 2024 state — removing the elevated site elevation and freeboard requirements that affected HUD-assisted and HUD-insured projects in or near floodplains. For LIHTC developers relying on FHA-insured debt or other HUD program dollars, the proposal would reduce site selection friction and eliminate costly engineering requirements triggered by the 2024 rule. Comments are due September 8, 2026. Key Takeaways: HUD's proposed rule targets the FFRMS final rule published in April 2024 — a full rescission of its elevated flood hazard standards. HUD's Part 55 floodplain management regulations would generally revert to their pre-April 2024 state. Flexibilities related to floodways, categorical exclusions, exemptions from Part 55 applicability, and the decision-making process would be preserved — not rescinded. Deals using FHA 221(d)(4) or 223(f) financing on sites near Special Flood Hazard Areas are directly affected — reduced elevation and freeboard requirements lower development cost and complexity. Developers and syndicators with deals in the pipeline structured around FFRMS requirements should revisit site engineering assumptions with environmental counsel. The public comment period closes September 8, 2026 — state HFAs, syndicators, and developers have a direct opportunity to shape the final rule. The proposed rule represents a broader rollback of Biden-era climate risk standards embedded in HUD program requirements. This proposal is a significant policy reversal with real deal-level implications. For teams active in HUD-insured lending or layering HUD grants into LIHTC transactions, now is the time to assess how the FFRMS has affected your underwriting and site selection — and whether the retained flexibilities adequately address floodplain risk management going forward. Engaging in the comment process before September 8 is the clearest way to influence the final outcome. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.