[Federal Register Volume 89, Number 79 (Tuesday, April 23, 2024)]
[Rules and Regulations]
[Pages 30850-30914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06246]



[[Page 30849]]

Vol. 89

Tuesday,

No. 79

April 23, 2024

Part III





Department of Housing and Urban Development





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24 CFR Parts 50, 55, 58, et al.





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

  Federal Register / Vol. 89 , No. 79 / Tuesday, April 23, 2024 / Rules 
and Regulations  

[[Page 30850]]


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 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.

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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: [email protected]. 
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.
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    \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.
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    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.):
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    \2\ 42 U.S.C. 3531.
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     to use all practicable means;
     to improve and coordinate Federal plans, functions, 
programs, and resources to the end that the Nation may:
    [cir] fulfill the responsibilities of each generation as trustee of 
the environment for succeeding generations;
    [cir] assure for all Americans safe, healthful, productive, and 
esthetically and culturally pleasing surroundings;
    [cir] 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

[[Page 30851]]

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.).
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    \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.
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    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\
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    \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.
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    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:
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    \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 Sec.  55.2(b)(10) to Sec.  
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.
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     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
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    \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.
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     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

[[Page 30852]]

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

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[[Page 30853]]

    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.
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    \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.
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    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

[[Page 30854]]

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).
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    \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 Sec.  55.12 of this final rule.
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    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 Sec.  55.7, HUD requires 
that the FFRMS floodplain be defined using CISA where data is available 
and actionable.
    As described in Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 
Sec.  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 Sec. Sec.  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

[[Page 30855]]

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.
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    \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 Sec.  55.2 and incorporates it into a new Sec.  
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 Sec.  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 Sec.  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 Sec.  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,\25\ 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 Sec.  55.5. The flood insurance topic 
requirements covered in the new Sec.  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, Sec.  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 Sec.  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 Sec.  
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

[[Page 30856]]

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.
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    \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 Sec.  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 Sec.  
55.6 also describes how to determine whether the 8-step decision making 
process \28\ is required and whether the proposed action would require 
notification and flood insurance. The new Sec.  55.6 does not create 
any new requirements but, to assist practitioners, Sec.  55.6 does 
provide a process to comply with part 55. The new Sec.  55.6 also moves 
a summary of documentation requirements from Sec.  55.27 to Sec.  
55.6(d).
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    \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 Sec.  55.8 and revises Sec.  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, Sec.  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, 
Sec.  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.\29\ 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 Sec.  
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 Sec.  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.
---------------------------------------------------------------------------

    \29\ 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 
Sec.  55.12(c)(7) and replaces it with the new Sec.  55.8(a)(1), which 
covers limitations on HUD assistance in floodways. The new Sec.  
55.8(a)(1) clarifies that HUD assistance may be used in floodways in 
two circumstances:
    1. Where an exception in Sec.  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 Sec.  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 Sec.  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 Sec.  55.12(g). The revised Sec.  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 Sec.  55.9 and revises Sec.  55.10 to 
address issues regarding wetlands identification and HUD's limitations 
on work impacting wetlands.
    The new Sec.  55.9, ``Identifying Wetlands,'' builds on the 
definition of ``wetlands'' in Sec.  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

[[Page 30857]]

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\
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    \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 Sec.  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 Sec.  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 Sec.  
55.12(a)-(c) into three separate sections, Sec. Sec.  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 (Sec.  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 (Sec.  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 (Sec.  55.14). Beyond this 
revision, the final rule makes only limited changes to the exceptions 
themselves.
1. Exceptions in Sec.  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 Sec.  55.12(c)(8) is 
removed. HUD is removing the exception described in the current Sec.  
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 Sec.  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 Sec.  
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 Sec. Sec.  55.13 and 55.14
    The final rule makes minimal changes to the activities listed in 
the current Sec.  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 Sec.  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 Sec.  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 Sec.  
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 
Sec.  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, Sec.  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 Sec.  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

[[Page 30858]]

to Environmental Justice.'' \32\ 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 Sec.  55.20 previously described, 
this final rule significantly expands Step 5 in Sec.  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 Sec.  
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 Sec.  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 Sec.  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, Sec.  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, Sec.  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 Sec.  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 Sec.  55.20(e)(3), 
which defines mitigation measures specific to critical actions, with a 
new Sec.  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 Sec.  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 Sec.  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 Sec.  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

[[Page 30859]]

55 across a geographic area without relying on Sec.  55.25.
    The final rule relocates instructions on documenting 24 CFR part 55 
decision making in the HUD environmental review record from Sec.  55.27 
to Sec.  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 Sec.  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 Sec.  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, Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  
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 Sec.  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 Sec.  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 Sec. Sec.  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 Sec.  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 Sec.  55.30. As described in Sec.  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

[[Page 30860]]

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 Sec.  55.7 would not affect the validity and 
administration of the remainder of Sec.  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

[[Page 30861]]

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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 
Sec.  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 Sec.  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 Sec.  55.8(a)(2) if there are no 
structures or improvements located in the floodway, and subject instead 
to Sec.  55.8(a)(1).
    Section 55.9. In Sec.  55.9(a), the final rule makes minimal 
changes to align the text of Sec.  55.9(a) with Sec.  55.10.
    Section 55.10. In Sec.  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 Sec.  
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 Sec.  55.13(e), the final rule clarifies that the 
exception to Sec.  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 Sec.  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 Sec.  55.12(b).
    Section 55.16. In Table 1 to Sec.  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 Sec.  55.8.
    Section 55.20. The final rule adds a new paragraph (e)(2)(iv) to 
Sec.  55.20 to clarify that, if applicable, minimization techniques 
include identifying and incorporating FEMA identified Severe Repetitive 
Loss mitigation as outlined in Sec.  55.8(c). The final rule also makes 
minimal changes to Sec.  55.20(a) to align the language with Sec.  
55.10. The final rule also adds nature-based approaches as an 
alternative method for avoiding impacts to wetlands and floodplains in 
Sec.  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 Sec.  55.21(b) 
to improve readability. Additionally, Sec.  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 Sec.  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 
Sec.  200.926(a) that would have applied the elevation standard in 
Sec.  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 Sec.  200.926(a) in the final rule 
to avoid creating adverse impacts on homeowners renovating their 
existing single family homes in low-cost areas.

[[Page 30862]]

    Section 200.926d. The final rule does not apply Sec.  200.926d 
elevation requirements to substantial improvement activities. The final 
rule also clarifies that for the elevation certificate required by 
Sec.  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.

[[Page 30863]]

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 Sec.  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

[[Page 30864]]

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.
---------------------------------------------------------------------------

    \34\ 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 Sec.  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.

[[Page 30865]]

    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 Sec.  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.\35\ 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.
---------------------------------------------------------------------------

    \35\ 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.\36\
---------------------------------------------------------------------------

    \36\ 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

[[Page 30866]]

reliable and consistently documented building elevations.
    Another commenter reasoned that FVA is the most accurate method of 
identifying flood risk and would be the most efficient use of 
government resources. Additionally, the commenter said FVA could be 
even more protective by adding two or three feet to the base flood 
elevation. This commenter urged HUD to consider further research into 
the FVA to compare the flood resiliency of HUD projects built to this 
increased standard to those that were not and into the possible 
benefits of using information in State Hazard Mitigation Plans.
    Other commenters supported the FVA over the 0.2-percent-annual-
chance flood approach because many sites do not have the 0.2-percent-
annual-chance floodplain mapped and using the FVA across the board 
would result in a more consistent approach. Another commenter agreed 
that FVA is familiar to most stakeholders and supported its continued 
use given that it was HUD's previously selected method in 2016.
    One commenter supported the inclusion of the horizontal floodplain 
when using the FVA.
    Several commenters critiqued the requirement to add three feet to 
the BFE for critical actions, regardless of known or previous flood 
risk, and predicted this would lead to a reduction in density, higher 
costs, higher rents, and lower valuation of properties.
    One commenter asked how the FVA method would account for high 
hazard areas that are subject to sea level rise and concurrent land 
subsidence.
    HUD Response: HUD disagrees that the FVA should be utilized as the 
preferred approach to defining the FFRMS floodplain. While the FVA 
provides a beneficial fallback option when CISA and the 0.2-percent-
annual-chance flood approach are unavailable, it does not account for 
sea level rise and the rising risk of flooding over time. The 0.2-
percent-annual-chance flood approach is preferred to the FVA as it 
allows grantees to utilize existing tools to visually display the more 
protective horizontal extent of the floodplain. As stated earlier in 
section II.B., HUD requires that the FFRMS floodplain be defined using 
CISA where data is available and actionable, as it is the most 
scientifically accurate in providing impacts to the floodplain from 
climate change. As described in Sec.  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.
    HUD disagrees that utilizing FVA as the preferred approach would be 
the most efficient use of government resources. HUD believes that the 
additional resilience provided by utilizing the hierarchy of CISA, then 
0.2-percent-annual-chance flood approach, and finally FVA provides for 
a more resilient and effective use of resources than using a single 
approach across the board.
    HUD appreciates the commenter's support for the inclusion of the 
added horizontal area under the FVA approach.
    E.O. 13690 directs HUD to elevate critical actions at least three 
feet above freeboard value when using the FVA regardless of any 
previous flood risk at the site. While the FVA does not necessarily 
consider climate change because it is based on FEMA mapping of the BFE, 
a Federal tool for CISA is expected to be available in coastal and 
high-risk areas in FY24. As HUD's preferred methodology, CISA will 
better be able to account for sea level rise over time than other 
methodologies, even if they are more protective than current standards.
3. Other Alternative Approaches
    One commenter suggested that HUD should consider looking to nearby 
areas that do have CISA resources available rather than solely relying 
on the two alternative approaches in the proposed rule.
    One commenter requested certain public facilities such as fire and 
police stations, emergency medical facilities, and schools be given a 
heightened level of protection, and that HUD could look to more 
stringent standards for such structures from other entities.
    One commenter asked HUD to reconsider using Advisory Base Flood 
Elevations (ABFE) to assess risk. ABFEs established after major flood 
events are often much higher than the 0.2-percent-annual-chance flood 
elevation, thus ABFE may result in situations where development would 
be required to elevate well above what the other proposed approaches 
would require. The commenter asked HUD to exclude ABFE from 
establishing elevations though, as it may not represent the true 
floodplain and could result in excessive fill or loss of opportunities 
to develop affordable housing.
    One commenter noted that 0.2-percent-annual-chance floodplain 
elevation is not noted on FIRMS, which could lead to subjective 
elevation determinations by the technical experts required.
    Another commenter recommended a new approach entirely, given that 
FEMA FIRM maps fail to account for forward-looking climate change and 
are not necessarily reliable with respect to historical flood risk 
either.
    HUD Response: HUD agrees with the commenter and has revised the 
language of the rule at 24 CFR 55.7 to clarify that it permits 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 provide data or other methods to identify 
the FFRMS floodplain using CISA for a particular project. HUD also 
notes that critical actions require a higher standard of protection, as 
their definition indicates, due to the potentially extreme impacts of 
flooding.
    HUD believes that use of interim flood hazard data such as ABFEs is 
acceptable and that they can provide a realistic picture of the true 
floodplain when drawn by FEMA. While FEMA does not yet have 
comprehensive coverage of elevations on the 0.2-percent-annual-chance 
floodplain published maps, grantees will have the option of utilizing 
the FVA or calculating the 0.2-percent-annual-chance elevation when 
those elevations are unavailable from FEMA sources.
4. Questions About the Proposed CISA Approach
    One commenter asked how maps would address the unpredictability of 
elevation sinking and if the maps would be adjusted yearly. Another 
commenter asked how HUD will decide what FIRM to go by and how a lender 
can be assured that the benchmark is accurate. This commenter also 
asked what happens when the FIRM is changed. Other commenters asked if 
flood studies would be required if there was insufficient information 
to establish FFRMS floodplains with one of the three approaches.
    One commenter asked HUD to confirm whether the new rules apply to 
existing HUD-insured projects or federally funded projects seeking 
refinancing or acquisition and to detail all HUD Multifamily Housing 
programs that are expected to comply with this new guidance or any 
exceptions that make projects exempt or require compliance with these 
new rules.
    HUD Response: HUD intends to provide additional guidance to 
grantees and practitioners to help them understand what options are 
available

[[Page 30867]]

when none of the three approaches have sufficient information to 
establish the FFRMS floodplain. Generally, HUD will rely on project-by-
project technical assistance to help grantees find and utilize best 
available data to make their determinations. HUD believes that CISA 
tools will be regularly updated with best available climate and 
topographic data as outlined in the FFRMS CISA State of the Science 
Report.
    HUD intends that the CISA provisions of the final rule will apply 
to any project funded by programs subject to part 55 review, including 
Multifamily FHA programs, in accordance with the compliance dates 
described in the Compliance Date section of this final rule.
B. Question #2: Whether HUD Should Define the FFRMS Floodplain for Non-
Critical Actions as Whichever Is Lower Between the 0.2-Percent-Annual-
Chance Floodplain or the Base Flood Elevation Plus Two Feet of 
Freeboard, Where CISA Resources Are Not Available
1. Support for HUD's Proposed Standard
    Several commenters expressed support for whichever approach would 
offer the most protection when CISA is not available. Several of these 
commenters emphasized that the alternative proposed in Question #2 
could significantly reduce flood resilience in some areas especially 
given that flood events are likely to become deeper and more frequent 
and because livelihoods, resident health, and safe homes are at stake. 
Another commenter said that any reduced short-term cost in using the 
less stringent approach would come at greater long-term expenses and 
would run counter to the risk management approach identified by the 
Government Accountability Office. The commenter also noted that models 
may underrate flood risk and the more protective approach is justified 
by the precautionary principle.
    Another commenter urged HUD to consider collaboration with other 
agencies to gather data for critical actions in the proposed FFRMS 
floodplain.
    HUD Response: HUD appreciates the feedback from commenters 
regarding the need for higher elevation standards and protections as 
flood events worsen due to climate change. The intent of HUD's 
preference for the CISA option is to be more proactive and protective 
as flood risks increase over time and to use the best science available 
at the time the project is considered. HUD believes that the process 
for using the 0.2-percent-annual-chance flood approach or the FVA when 
CISA is not available or actionable provides a protective and efficient 
process that is not only more likely to provide a more protective 
approach but also reduce administrative burden (e.g., comparison 
between the 0.2-percent-annual-chance flood approach and FVA 
elevations).
    For critical actions, where comparison between the 0.2-percent-
annual-chance flood approach and the FVA +3 feet elevations is 
necessary, HUD believes the extra analysis is warranted to ensure more 
protection for those actions for which any risk of flooding is simply 
too great. HUD is also supportive of further collaboration with other 
agencies to analyze data on critical actions as it becomes available.
2. Support for the Lower Standard
    Several commenters asked HUD to allow for the lower standard for 
non-critical actions. These commenters were concerned about 
incentivizing excessive fill in 0.2-percent-annual-chance floodplains.
    Several commenters suggested that the FVA method should take 
preference over the 0.2-percent-annual-chance flood approach as it is 
easier to calculate. Some of these commenters went onto suggest that a 
site-specific flood study would be the best option.
    HUD Response: HUD disagrees with commenters' feedback that lower 
standards should be used for non-critical actions. Since flood risks 
are increasing as a result of climate change and associated sea level 
rise, lowering the current regulatory standard on top of this increased 
risk would create an exponentially riskier environment for Federal 
investments and go against HUD's stated goals. HUD also disagrees that 
higher standards create incentive for fill as elevation does not 
necessarily require fill. In fact, the rule no longer provides an 
exemption for LOMR based on fill, further disincentivizing its use.
    HUD disagrees that the FVA method is easier for grantees and 
practitioners to calculate than the 0.2-percent-annual-chance flood 
approach. The 0.2-percent-annual-chance floodplain is mapped by FEMA 
and where it is available for non-critical actions, grantees would not 
need to calculate anything. While HUD agrees that site-specific flood 
studies can be helpful, requiring them for all projects would be 
prohibitively expensive.
C. Question #3: Whether, and Under What Conditions, Part 55 Should 
Permit HUD or the Responsible Entity To Rely on the FFRMS Floodplain as 
Defined by Another Federal Agency
1. Support for Alignment With Other Agencies
    Several commenters supported HUD using FFRMS boundaries established 
by other agencies to reduce redundancy in Federal oversight. These 
commenters also requested a process by which a stakeholder could 
request a reconsideration of HUD's floodplain boundaries.
    Several commenters urged a cohesive and consistent Federal vision 
when there are multiple flood risk related efforts occurring 
simultaneously to avoid conflicting standards and potential 
noncompliance. One commenter noted the weaknesses inherent in not 
having a comprehensive nationwide approach to defining floodplains. 
This commenter encouraged HUD to include requirements for tracking the 
location and quantity of developments in floodplains as part of its 8-
step decision making process. The commenter urged collaboration among 
Federal agencies to track and quantify the effectiveness of E.O. 11988 
and E.O. 13690. Specifically, this commenter recommended that Federal 
agencies collaborate with the National Floodplain Functions Alliance.
    One commenter suggested Federal agencies align their resilience and 
disaster response policies, including building codes and elevation 
requirements.
    One commenter expressed support for a process whereby a project's 
lead Federal agency's implementation of FFRMS is sufficient for the 
entire project, as long as such approach looked at long-term risks.
    More broadly, several commenters asked that HUD participate in 
collaboration with other agencies, affiliations, and interagency 
groups.
    Several commenters stated that the Federal Interagency Floodplain 
Management Task Force (FIFM-TF) is an existing interagency body to 
facilitate collaboration and ensure that all agencies are using a 
forward-thinking, climate-informed approach. One commenter noted that 
HUD should rely on FIFM-TF policies, as long as its deliberations are 
more transparent and accessible to interested non-Federal stakeholders. 
This commenter suggested that since various Federal agencies have 
developed tools, data, and expertise, that collaboration would lead to 
more consistent CISA floodplain definition methods.

[[Page 30868]]

    Several other commenters endorsed HUD's cooperation with the White 
House Flood Resilience Interagency Working Group. Some of these 
commenters said HUD should prioritize funding and interagency 
coordination, including continued participation in this working group. 
One commenter was concerned that the working group would not have 
enough resources available to accurately identify flood risks 
throughout the country. Another commenter asked who in this working 
group is preparing the CISA tools and whether they have any conflicts 
of interest between potential consultants working on these resources.
    Several commenters urged HUD to rely on FEMA and its flood-risk 
data and to engage with FEMA to ensure complementary approaches as the 
agencies implement FFRMS through rulemaking. Another commenter 
emphasized that FEMA has spent billions of dollars on flood engineering 
studies and that adopting an alternative flood map dataset would waste 
previous Federal investments. The commenter went on to say that other 
entities, such as States, cities, and communities, have come to rely on 
FEMA's flood map data for various purposes. Another commenter noted 
that because FEMA is actively working to incorporate climate risk and 
future conditions into its data and mapping program, HUD should delay 
finalizing the proposed rule and continue to rely on FEMA's flood risk 
and mapping tools until its formal release of climate-informed flood 
risk data and flood maps.
    One commenter supported coordination between HUD, FEMA, USACE, and 
other agencies to consistently articulate flood risks and best 
practices. This commenter reasoned that a comprehensive Federal 
narrative would allow for consistency and transparency for owners, 
local decision makers, and regulators as opposed to the current 
contradicting flood risk identification efforts.
    One commenter suggested that HUD align its disaster recovery and 
mitigation construction standards with FEMA's Building Resilient 
Infrastructure and Communities and Public Assistance Programs, which 
have been successfully implemented for several years. The commenter 
said that adopting the flood provisions captured in modern building 
codes consistently across like programs would help the Federal 
government reduce complexity and increase programmatic efficiency.
    One commenter asked that HUD share what it learns from developing 
CISA mapping tools with other Federal agencies.
    HUD Response: HUD's outlined process in the rule requires the use 
of Federal CISA data where available and actionable, as described in 
Sec.  55.7, or permits the voluntary use of formally adopted local CISA 
data, as described in Sec.  55.7(f). A Federal agency tool is being 
developed by the Council on Environmental Quality (CEQ), the Office of 
Science and Technology Policy (OSTP), FEMA, NOAA, and HUD with input 
from the White House Flood Resilience Interagency Working Group and the 
FFRMS Science Subgroup. The Science Subgroup of the White House Flood 
Resilience Interagency Working Group has found that accounting for sea 
level rise in the coastal environment represents available and 
actionable data to help identify the CISA floodplain. The White House 
Flood Resilience Interagency Working Group has developed a job aid to 
help agencies identify the floodplain using the three approaches.\37\ 
This job aid will help provide consistency of FFRMS application across 
the Federal Government.
---------------------------------------------------------------------------

    \37\ See https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf.
---------------------------------------------------------------------------

    Where Federal CISA data is not available and actionable, as 
provided in Sec.  55.7, and grantees or practitioners use local, State, 
or Tribal CISA data, the 0.2-percent-annual-chance flood approach, and/
or FVA, there may be some variation in the exact horizontal and 
vertical extents of the FFRMS floodplain depending on the approach that 
is utilized. HUD does not believe that these variations are likely to 
be significant and further believes that minor floodplain variation is 
worth the greater protection that the methodology in HUD's rule 
provides. HUD's rule does not define the boundary of the floodplain, 
only a methodology for determining where that boundary is. HUD does not 
intend to implement a formal process to contest the methodology used to 
define the floodplain at this time but will continue to monitor and 
make changes to policy, as necessary, to ensure effective determination 
of the FFRMS floodplain.
    HUD agrees with the commenter that Federal disaster response 
policies, inclusive of their floodplain management policies, should be 
complementary and cohesive. As such, HUD drafted this rule to align 
with the E.O. 13690 guidance. Additionally, HUD appreciates the 
commenter's encouragement for HUD to continue cooperating with the 
White House Flood Resilience Interagency Working Group.
    HUD's Federal partners are also engaging in rulemaking to update 
FFRMS floodplain requirements to comply with E.O. 13690. HUD cannot 
wait for these other agencies' rules and must act to protect its own 
investments which are otherwise at risk. However, each agency, 
including HUD, is developing these regulations with feedback provided 
through a required interagency review process which occurs prior to 
publication of any proposed and final rulemaking.
    In cases where a Federal project is funded by multiple Federal 
funding sources, HUD plans to utilize the Unified Federal Review (UFR) 
to assist in the collaborative cross-agency/Department discussions to 
resolve compliance issues and ensure cohesion in project funding and 
goals. Additionally, HUD has procedures in place to adopt the 
environmental reviews of other Federal agencies to avoid unnecessary 
duplication of effort.
    HUD supports its interagency partners and is always looking for new 
opportunities to work with other industry leaders in addition to other 
Federal agencies. While HUD agrees with the general sentiment behind 
adopting resilient building codes, HUD does not believe this rule is 
the proper place to include them.
2. Concerns With Relying on Other Agencies To Define the Floodplain
    Several commenters expressed concerns regarding HUD relying on 
another agency's definition of FFRMS floodplains.
    Several commenters said that HUD must ensure it is addressing 
resident health and safety as well as economic-related flood disaster 
relief in setting its floodplain determination, urging HUD to only rely 
on another agency's designation of FFRMS floodplain where that agency's 
methodology is at least as rigorous as HUD's; in other words, rely on 
whichever generates the highest elevation and most expansive horizontal 
floodplain. Another commenter similarly expressed concern for adopting 
other agencies' floodplain policies because they believe that HUD's 
proposed rule likely better protects wetlands. The commenter said that 
HUD should not rely on other Federal agencies at a time when the 
USACE's analysis for wetlands has changed through proposed rulemaking 
and the Supreme Court case Sackett v. EPA \38\ regarding the definition 
of ``waters of the United States.''
---------------------------------------------------------------------------

    \38\ 598 U.S. 651 (2023).
---------------------------------------------------------------------------

    Several commenters suggested that by not relying on FEMA's maps in 
its

[[Page 30869]]

proposed rule, HUD is indicating that FEMA's maps cannot be relied 
upon. Specifically, one commenter said the language that an interim or 
preliminary FEMA map could not be used if it is lower than the current 
FIRM or FIS indicates the FEMA maps cannot be relied upon for accurate 
flood risk data.
    HUD Response: HUD agrees that it should avoid relying on another 
agency's definition of FFRMS floodplains. E.O. 13690 requires agencies 
to utilize one of the processes (CISA, 0.2-percent-annual-chance flood 
approach, FVA) based on best-available information and FIRMS from FEMA 
to define the FFRMS floodplain.
    HUD is looking for the most scientifically prudent elevation based 
on available data that will provide protection of life, property, and 
the Federal investment. Using the CISA approach, HUD's preferred 
method, will likely result in the most protective elevation based on 
scientific data compared to other methods.
    HUD believes that FIRMs provide an accurate point in time snapshot 
of flood risk. Unfortunately, these risks are continually changing and 
given the time horizon for FIRM updates they may be generally less 
accurate than HUD would prefer. The FFRMS approaches outlined in HUD's 
final rule allow for greater protection in the face of changing needs 
and uncertainty than a floodplain management approach solely based on 
FEMA's mapped BFE boundary.
D. Question #4: What Factors or Stakeholder Needs HUD Should Consider 
When Establishing an Effective Date for This Rule
1. Support for Extended Effective Date
    Several commenters urged HUD to extend the effective date of 
implementation to at least one year after issuing this rule to avoid 
unforeseen expenses and delays for projects already in planning stages 
because development planning often begins years prior to land 
acquisition and formal planning processes. Of those commenters, several 
raised concerns that absent extension, developers would bear 
unequitable financial losses due to changes in land value purchased, 
revisions to plans, and resulting delays.
    One commenter specifically urged HUD to include a grandfathering 
provision that would allow new Community Development Block Grants 
(CDBG) and HOME Investment Partnerships Program (HOME) awards, as well 
as FHA multi- and single family projects already under development and 
applications submitted prior to the effective date to proceed under 
current regulations. This commenter reasoned that if developers had to 
repeat the lengthy planning, platting, and government approval process 
for new development under changed regulations, they would be forced to 
engage in more consultation, negotiation, and compromise among all 
project stakeholders. This commenter added that the planning process 
for FHA insured projects is particularly lengthy.
    Several commenters urged HUD to consider stakeholders' need to 
access the CISA maps prior to implementation, stating that it is 
impossible to examine implications of the rule absent sufficient review 
of the CISA method that the rule relies upon. Several commenters 
suggested that stakeholders needed at least one year to access the CISA 
maps prior to implementation. One commenter urged HUD to delay 
implementation until the CISA maps are available and approved and asked 
when HUD expected the tools will be made available.
    Several other commenters went further, asking HUD to factor in time 
to engage industry stakeholders in developing the CISA mapping tool 
prior to implementing this rule. One commenter reasoned that improper 
development of this tool, or reliance on problematic data, could 
negatively impact industry stakeholders (e.g., developers, insurance 
providers, floodplain mapping experts).
    One commenter sought HUD's consideration that large public housing 
authorities need time to determine the impact of the regulation on 
costs of rehabilitation and repair, including a portfolio-wide review 
of covered properties and a building-by-building analysis. This 
commenter estimated that this review would take at least a year after 
final rule issuance.
    One commenter suggested that HUD consider the potential positive 
result that proposed FHA mortgage requirements may incentivize 
communities to adopt 2-foot freeboard standards matching the HUD 
Minimum Property Standards, so that all development in special flood 
hazard areas will maintain qualification for FHA-insured mortgages. 
This commenter suggested that HUD extend the effective date for FHA 
mortgage requirements by one year to allow this commenter and other 
stakeholders to assist communities in updating their floodplain 
management codes. For all other aspects of the rule, this commenter 
urged HUD not to extend the effective date.
    HUD Response: HUD appreciates the feedback from commenters 
regarding concerns over ongoing projects incurring unforeseen expenses 
and delays. As such, HUD is setting a delayed compliance period for the 
rule. Compliance with this final rule is required no later than 30 days 
after the rule becomes effective, except compliance with the 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 the amendments to 24 CFR part 55 is similarly required 
no later than January 1, 2025, for FHA programs and programs subject to 
the MAP Guide, as more thoroughly described in the Compliance Date 
section of this final rule. This delayed compliance period will provide 
regulated entities time to come into compliance with this rule, 
including the portions of the rule implementing the Minimum Property 
Standards. HUD believes this delayed compliance period will allow ample 
time for project sponsors to prepare for any increased costs for 
compliance with the rule. Additionally, HUD notes that projects 
currently in development which have completed environmental reviews 
would not be required to backtrack for compliance.
    HUD disagrees that stakeholders require access to CISA maps prior 
to implementation. After this rule becomes effective, CISA maps will 
not be used if they are not available and actionable. The three-tiered 
approach to define the FFRMS floodplain adopted by this rule will allow 
responsible entities to utilize the best available data and tools in 
their area to understand and mitigate their flood risk. As described in 
Sec.  55.7, where State, Tribal, or local jurisdictions have already 
invested in data and modeling and created CISA data and tools, HUD 
permits the voluntary use of those tools if they result 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 paragraph (b) or (c) of Sec.  55.7, if CISA data 
is available and actionable under paragraphs (b)(1) or (c)(1).
    Federally assisted multifamily housing, especially housing for low-
income and vulnerable populations, including the public housing 
portfolio, is currently in need of the additional flood mitigation and 
resilience requirements the rule requires. The rule will ensure that as 
properties undergo rehabilitation, flood mitigation and resilience will 
be incorporated. HUD does not believe it is appropriate or necessary to 
delay the implementation

[[Page 30870]]

of the part 55 update of this rule for additional study.
2. Support Implementing as Soon as Possible
    Several commenters asked HUD to consider the urgent need to 
mitigate loss of properties and lives, along with the health and 
financial inequalities exacerbated by increasing flooding events, 
citing statistics on projected increases in flooding and disparate 
impacts of these events. Another commenter asserted that an effective 
date no later than January 1, 2025, would provide ample time for 
development stakeholders to prepare for implementation.
    One commenter urged consideration of the number of HUD-supported 
new construction and substantial improvement projects that will or will 
not have enhanced resiliency and flood protections, depending on any 
delays to implementing this rule.
    Another commenter suggested that HUD should consider the regulatory 
impact findings that the reduction in financial damages over the life 
of the project is greater than the one-time construction cost increases 
necessary for implementing the rule. This commentor also urged HUD to 
consider its knowledge of these impending requirements since at least 
2015 as a factor supporting prompt implementation, with an effective 
date of no later than one year.
    HUD's Response: After reviewing public comments, HUD has determined 
to provide a delayed compliance period to allow entities regulated by 
this rule a grace period to come into compliance with the revised 
requirements. 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. 
Compliance with the amendments to 24 CFR part 55 is similarly required 
no later than January 1, 2025, for FHA programs and programs subject to 
the MAP Guide, as more thoroughly described in the Compliance Date 
section of this final rule. Compliance with all other parts of this 
rule and for all other programs, except for those noted for parts 200 
and 55, is required no later than 30 days after the rule becomes 
effective.
3. Additional Considerations
    One commenter suggested that HUD consider the Supreme Court's 
decision on the Clean Water Act's definition of ``waters of the United 
States'' in Sackett v. EPA.
    HUD's Response: HUD appreciates the feedback from commenters; 
however, HUD's definition of a wetland is unaffected by the Supreme 
Court's ruling in Sackett vs. EPA because HUD's wetlands definition 
originates from E.O. 11990, not from the Clean Water Act.
E. Question #5: Feedback on Exception Requiring the More Protective FVA 
Approach for Coastal Areas
    Several commenters continued to recommend the most protective 
standard, supporting HUD's excepted use of the FVA standard in coastal 
areas. One commenter reasoned that wave action, sea level rise, land 
subsidence, warmer seas, and intensification of tropical storms/
hurricanes compound uncertainty in coastal areas. Another commenter 
supported the higher standard to increase flood protection in areas 
where the mapped floodplain may not accurately reflect risks from wave 
action. Another commenter reasoned that the higher standard for coastal 
areas is necessary due to particular vulnerabilities of coastal 
communities to tidal flooding.
    One commenter suggested that HUD's final rule should allow for the 
flexibility to use the most protective and up to date science in 
coastal regions or where higher quality data and analytics are 
available.
    One commenter asked about HUD's plan for renovations in order to 
eventually have all projects in accordance with the new standards, and 
what the projected date is to achieve that plan. The commenter also 
asked, if there is no plan, whether one can be added to protect 
sustainability of coastal projects.
    Other commenters opposed the higher standard for coastal areas, 
urging HUD to use a consistent approach in defining the FFRMS 
floodplain. These commenters suggested that compliance is stronger when 
the rules are consistently applied and easy to understand and 
recommended the FVA approach in all circumstances.
    HUD's Response: HUD appreciates the commenters' preferences 
regarding the use of the most protective standard; however, HUD intends 
to retain the three-tiered decision making process to define the FFRMS 
floodplain as originally proposed to avoid complicating the process for 
builders and grantees. While HUD certainly encourages grantees to use 
the most protective approach where CISA isn't available or actionable, 
the Department believes that requiring grantees to look at both the FVA 
and 0.2-percent-annual-chance flood approach is unnecessary for 
noncritical actions. Instead, HUD will require review of both 0.2-
percent-annual-chance flood approach and FVA to determine elevation 
heights only for critical actions. HUD believes that CISA tools will 
likely be available in coastal areas more quickly than inland locations 
and as such, should help to better determine the effects of sea level 
rise and wave heights for those structures.
    HUD believes that a tiered approach with a preference for using 
CISA, where possible, before considering the 0.2-percent-annual-chance 
flood approach and/or FVA approaches, allows for the best outcome of 
both protectiveness and functionality for HUD grantees and recipients.
    It should also be noted that the Federal funding action is the 
trigger for NEPA and part 55 compliance. Where a HUD-funded or -insured 
action is proposed, an environmental review meeting part 55 
requirements is required. HUD will not be enforcing these requirements 
retroactively for projects with a completed environmental review.
F. Question #6: Feedback on Alternative Measures That May Help To 
Promote the Production and Availability of Affordable Housing in the 
Near-Term While Still Promoting Flood Resilience
1. Arguments That HUD's Proposed Rule Will Impede Affordability and 
Housing Supply
    Several commenters raised concerns that development restrictions 
and/or increased costs to comply with proposed requirements would chill 
interest and ability to develop, operate, or rehabilitate affordable 
housing, resulting in higher rents and housing costs, limited ability 
to borrow, and/or unattainable loans. Additionally, several commenters 
stated that increased compliance costs will result in borrowers 
deferring or foregoing repairs and upgrades to existing affordable 
housing.
    One commenter disagreed with HUD's projected construction costs, 
asserting that HUD relied upon an outdated 2013 FEMA study, which fails 
to account for inflated input prices, supply chain challenges, and 
labor challenges. This commenter also questioned HUD's certification 
that there is no significant economic impact on small entities, citing 
that 88 percent of homebuilders and specialty contract firms are self-
employed independent contractors. The commenter provided its own survey 
of builders, finding that elevating single-

[[Page 30871]]

family home to two feet above BFE would add $5-$10 thousand dollars to 
cost of construction; and costs would be even higher where builders 
prefer slab foundations due to humidity, which are more expensive to 
elevate than homes on piers. Further, this commenter conducted the 
following analysis of the impacts of cost increases on homeowners and 
renters: a $1,000 increase in median home price would price 140,436 
households out of the market; a $1,000 rent increase per unit would 
price out an additional 32,289 renters.
    Several commenters explained that elevation requirements would 
cause increased transportation costs for soil import from certified 
fill sites and earthwork and compacting costs of the additional fill.
    Several commenters specifically identified the requirement to 
maintain flood insurance as causing additional operating costs, which 
will be passed along to residents in the form of higher rents and 
housing costs. Several commenters stated that it is unlikely that 
insurance costs for homeowners or multifamily owners will decrease 
sufficiently to offset the increased construction costs, asserting that 
HUD did not provide evidence that insurance costs will decline.
    One commenter stated that limiting the current streamlined 203(k) 
loan to $35,000 in renovations means that it may not be a lending 
option for borrowers mandated to raise substantially damaged properties 
to BFE +2 feet.
    Several commenters noted that affordable multifamily building and 
rehabilitation projects may be deferred, scaled back, or foregone where 
increased costs cannot be offset by increased rent, preventing delivery 
of needed housing supply. Several of these commenters reasoned that 
there is a direct correlation between Federal housing policies 
impacting housing supply and affordability and homebuilding 
stakeholders' willingness to create affordable housing supply.
    One commenter noted that underproduction of housing has translated 
into higher housing costs, resulting in a decline in the number of 
affordable units currently available. This commenter outlined 
difficulties facing housing providers--narrow margins, ongoing labor 
and material challenges, elevated regulatory costs--and cited recent 
surveys indicating that 79 percent of developers reported construction 
delays, with almost half citing project infeasibility as the cause.
    One commenter stated that the proposed rule's floodplain expansion 
will reduce opportunities to develop HUD projects in low-lying areas 
and thus reduce housing for low-income families, who are in turn less 
likely to be able to afford relocation.
    HUD Response: HUD appreciates the commenters' feedback about their 
concerns that additional elevation requirements could increase costs 
and chill investment in future housing. HUD acknowledges that the 
additional elevation requirements from the increased elevation 
standards proposed to the Minimum Property Standards and the increased 
regulatory footprint proposed in the part 55 update could have 
additional costs associated with them. In the RIA, HUD found that the 
increase in construction costs for new residential structures of 
elevating an additional 2 feet above BFE would average between 0.3 and 
4.8 percent of the building cost. HUD contends that the benefits of 
protection provided by these mitigations are greater than the cost of 
compliance. In fact, the RIA shows that the lower bound for losses 
avoided based on the updated part 55 provides more than $50 million in 
benefits even using the higher 7 percent discount rate. Federal 
investment in the construction of multifamily and/or public housing in 
riskier areas prone to flooding does not increase the availability of 
safe affordable housing units. It is HUD's goal to disincentivize 
continued Federal investment in high-risk flood-prone areas.
    Short term market volatility in prices and labor is a poor 
indicator for regulatory decisions and those factors are instead looked 
at in aggregate over longer study periods. HUD reviewed the best 
available studies and stands by the construction costs and potential 
impacts on builders of all sizes as outlined in the RIA.
    HUD strongly disagrees that elevation requirements would cause any 
change in transportation costs for fill. In its rule, HUD is not 
mandating how elevation is achieved; therefore, grantees are free to 
utilize methods of elevation that do not involve fill. Additionally, 
with the removal of the exemption for LOMRs based on fill, HUD is 
actively discouraging its use as a method for elevation.
    With this rule, HUD is not changing its requirements for 
maintaining flood insurance, which are mandated by statute. Therefore, 
HUD disagrees that utilizing existing requirements will increase 
operating costs. HUD grantees have also always had the ability to 
extend flood insurance requirements beyond those established as the 
minimum by HUD. Additionally, HUD notes that HUD's encouragement for 
the purchase of flood insurance outside the 1-percent-annual-chance 
floodplain is not a requirement.
    HUD has decided to remove the elevation requirement for substantial 
improvement under the Minimum Property Standards to avoid adversely 
impacting homeowners renovating existing single-family homes. While HUD 
appreciates the commenter's feedback regarding 203(k) loans, Standard 
203(k) financing allows a homeowner to finance improvements with an 
insured mortgage that may be based on a loan-to-value ratio using 110 
percent of after improved value of the property. Regarding Limited 
203(k), on November 29, 2023, HUD published a draft Mortgagee Letter 
(ML), Revisions to increase the Maximum Rehabilitation Costs for 
Limited 203(k), Rehabilitation Period for both Standard and Limited 
203(k), and Consultant Fees Schedule for the 203(k) Rehabilitation 
Mortgage Insurance Program (Section 203(k) Program), for feedback on 
the FHA's Office of Single Family Housing Drafting Table. The ML 
proposes to expand the rehabilitation costs for Limited 203(k) from 
$35,000 to $50,000 and to $75,000 for high cost areas.\39\
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    \39\ The draft ML is available at https://www.hud.gov/program_offices/housing/sfh/SFH_policy_drafts.
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2. Arguments That HUD's Proposed Rule Will Improve Housing 
Affordability
    Several commenters asserted that property resilience investments 
are necessary to increase affordable housing at individual and/or 
government-wide levels.
    Several commenters suggested that reduced property damage and 
broader socio-economic costs (e.g., displacement) created by this rule 
outweigh potentially increased construction costs for projects in 
flood-prone areas, in turn increasing housing affordability. One 
commenter cited evidence that the number of affordable housing units at 
risk from coastal floods and sea level rise is expected to triple over 
the next 30 years.
    Several commenters stated that it is incorrect to measure the costs 
of flood resilience requirements solely by increased construction 
costs/home prices because the cost of homeownership also includes costs 
to live in, maintain, and insure a home over time, especially homes 
subject to recurrent natural disasters that may become uninhabitable 
(and the broader cost of communities becoming uninhabitable).

[[Page 30872]]

    Another commenter cited evidence that the savings benefits of 
building to modern building codes come without negatively impacting 
housing affordability, stating that no peer reviewed research finds 
otherwise. This commenter cited findings that insurance savings from 
meeting mitigation requirements can reduce homeowners' net monthly 
mortgage and flood insurance costs by at least 5 percent, balanced 
against about half a percentage point increase in home purchase price 
for improvements to model resilience codes in an area affected by 
riverine floods.
    Another commenter suggested that the proposed rule mitigates 
increased construction costs through its identification of practicable 
alternatives and provision of technical assistance to help recipients 
comply with new standards.
    One commenter argued that disaster resiliency standards will lessen 
reliance on HUD to rebuild and replace community assets damaged by 
natural disasters, allowing HUD to prioritize programs that increase 
the stock of affordable housing and availability of mortgage insurance. 
This commenter provided examples of post-flood closures of multifamily 
units precipitating negative shocks to local housing markets.
    Several commenters pointed to jurisdictions and programs that 
already require greater elevation standards and requirements than HUD 
as demonstrating that stronger standards are feasible and cost-
effective.
    One commenter urged that the demonstrated long-term financial 
benefits of flood adaptation (citing a 6:1 benefit-cost ratio for HUD- 
and FEMA-supported mitigation measures) should be extended to 
affordable housing residents.
    Another commenter supported measuring/scoring property-level risks 
across the spectrum of environmental hazards, providing government and 
private stakeholders with insight to balance the costs and benefits of 
adding finely tuned/tailored resiliency measures to building codes.
    HUD's Response: HUD appreciates the commenter's sentiment that 
property resilience investment from the Federal level is necessary to 
increase affordable housing. HUD agrees that the reduced property 
damage and broader socioeconomic benefits created by this rule outweigh 
the additional cost of compliance for flood-prone areas. This is even 
more important in areas that may be affected by climate change.
    HUD appreciates commenters' feedback regarding the measurement of 
the cost of flood resilience. While HUD agrees that the cost of a 
community becoming uninhabitable over time would have more devastating 
effects than simply more expensive housing, it is unfortunately 
difficult to quantify those consequences outside of their direct 
economic impact. Generally, HUD agrees with the commenter's sentiment 
that the savings benefits of modern building codes on housing outweigh 
any impacts on housing affordability. HUD has previously and will 
continue to help grantees review practicable alternatives when project 
costs are too high to build due to elevation requirements.
    HUD generally agrees with the commenter's feedback that the 
increased resilience standards should help avoid damages from future 
flood disasters and thus increase the longevity of new affordable 
housing. HUD appreciates its local partners that have already 
demonstrated the effectiveness and feasibility of higher standards in 
their communities.
3. Suggested Revisions Commenters Believe Will Help Promote Affordable 
Housing
    One commenter suggested that HUD amend the rule to provide greater 
financial flexibility to design and construction firms by quantifying 
design/construction-related costs to achieve the FFRMS as deferred 
maintenance instead of substantial improvements.
    Another commenter suggested that HUD proactively target financial 
and technical assistance to support low-income and historically 
disadvantaged communities, stating that opportunities recently codified 
by the Community Disaster Resilience Zones Act, Public Law No. 117-225 
could be instrumental.
    One commenter urged HUD to increase per unit maximums and provide 
waivers where necessary (i.e., match requirements) to ensure that 
communities in which the entire buildable area is within newly 
designated floodplains do not confront such high costs as to 
effectively cut off HUD funding.
    One commenter urged HUD to revise the flood elevation measurement 
for manufactured homes to be consistent with the site-built homes 
measurement, to ensure that manufactured homes remain cost effective. 
This commenter reasoned that expanding the supply of manufactured 
housing is a crucial component of preserving affordable housing and 
that a large number of manufactured homes are located on floodplains.
    HUD's Response: HUD believes that for the purposes of compliance 
with floodplain mitigation requirements under part 55, rehabilitation 
needs to be considered substantial improvement when the costs are more 
than 50 percent of the value of the structure and/or they include the 
expansion of units by more than 20 percent. HUD notes that simply 
because a project is considered a substantial improvement does not mean 
that that project cannot move forward under the current part 55 
requirements. Part 55 simply adds mitigation requirements to ensure 
that the overall structure is more resilient. Even in communities where 
large swaths of the buildable area fall into the regulatory floodplain 
of concern, the requirements do not prohibit building; they require 
mitigation to ensure new construction is safe. HUD notes that Sec.  
55.21 also provides an alternative process for existing nonconforming 
sites meeting specific thresholds for protectiveness to continue to 
receive support and avoid cutting off existing communities from Federal 
funding.
    HUD agrees with the commenter's feedback that HUD funding programs 
and technical assistance should benefit low-income and historically 
disadvantaged communities. Such benefits are explicit requirements for 
many HUD funding programs and are included in Goals 1 and 2 of HUD's 
Strategic Plan: Support Underserved Communities and Ensure Access to 
and Increase the Production of Affordable Housing.
    HUD agrees with the commenter about consistent regulations and HUD 
has and will continue to require that manufactured housing requirements 
be consistent with those for stick-built homes with regards to part 55 
elevation requirements. Under part 55, new siting and substantial 
improvement of manufactured housing units (MHUs) are considered the 
same as new construction and substantial improvement for stick-built 
homes and therefore subject to the part 55 elevation requirements. To 
clarify this policy, HUD has revised the rule language to reference 
MHUs in the definitions for new construction and substantial 
improvement.
    Further, for both manufactured homes and stick-built homes subject 
to part 55, to determine the lowest floor, HUD looks to FEMA's 
regulations in 44 CFR 59.1 and FEMA's Elevation Certificate guidance or 
other applicable current FEMA guidance. For manufactured homes in A 
Zones, FEMA recommends measurement of MHU elevation from the I-beam as 
a best practice. HUD recommends following FEMA best practice where 
feasible. For manufactured homes in coastal high

[[Page 30873]]

hazard areas (Zone V), FEMA requires measurement of MHU elevation from 
the bottom of the lowest horizontal structural member (e.g., the I-
beam).
    It is important to note that FHA-insured single family housing is 
not subject to part 55 and that FHA-insured manufactured housing is not 
subject to part 55 or to the 24 CFR 200.926d elevation standards under 
this final rule. Eligibility requirements, including elevation 
standards, for FHA-insured manufactured housing can be found at 24 CFR 
part 3285: Manufactured Home Installation Standards and 24 CFR 203.43f: 
Eligibility of Mortgages Covering Manufactured Homes, as applicable, 
which are outside the scope of this rulemaking. HUD understands that 
the part 55 elevation requirements for MHUs differing from the FHA 
insured MHU requirements may lead to confusion where HUD programs 
subject to part 55 are installing MHUs. To address this, HUD intends to 
release guidance and technical assistance material focused on these MHU 
requirements which should help project sponsors and responsible 
entities ensure compliant programs.
    HUD agrees with commenters that wish to minimize the disruption to 
the delivery of affordable housing. As such, after reviewing public 
comments, HUD has determined to provide a delayed compliance period to 
allow entities regulated by this rule a grace period to come into 
compliance with the revised requirements. Compliance with the 
amendments to part 200 of this rule, including the update to the 
Minimum Property Standards, is required for new construction where 
building permit applications are submitted on or after January 1, 2025. 
This delay is intended to allow home builders and developers ample 
opportunity to adapt and prepare for the requirements of this rule. For 
FHA programs and programs subject to the MAP Guide, compliance with the 
amendments to 24 CFR part 55 is similarly required no later than 
January 1, 2025, as more thoroughly described in the Compliance Date 
section of this rule. Compliance with all other parts of this rule and 
for all other programs, except for those noted for parts 200 and 55, is 
required no later than 30 days after the rule becomes effective.
4. Additional Suggestions To Promote Resilient and Affordable Housing
    Several commenters urged HUD to pair efforts to make floodplain 
housing more resilient with a focus on affordable housing development 
outside of floodplains and solving how to accommodate growing housing 
need as floodplain housing becomes increasingly uninhabitable. One 
commenter reasoned that focusing affordable housing development outside 
floodplains and wetlands will counter longtime exclusionary zoning 
practices and direct scarce financial resources to building affordable 
housing instead of mitigation activities. However, this commenter 
stated that HUD should still fund rehabilitation of existing affordable 
housing in floodplains through programs like Community Development 
Block Grants for Disaster Recovery (CDBG-DR) to prevent displacement. 
This commenter outlined their view of three root causes of the current 
shortage of affordable housing--Congress consistently underfunding 
housing subsidies; Congress's decade's long divestment in existing 
public housing; and a severe lack of disaster housing resources and the 
use of those limited funds for non-housing costs, and those funds 
disproportionately benefit homeowners over renters. Another commenter 
suggested that HUD proactively fund buyouts with relocation assistance 
for persons living at properties that have experienced severe 
repetitive losses.
    One commenter urged HUD to take the following additional measures 
to promote production and availability of affordable housing: (1) 
require HUD CDBG-DR and Community Development Block Grants for 
Mitigation (CDBG-MIT) grantees to rebuild public and affordable housing 
on a one-for-one basis, deeply affordable in lower-risk areas and in a 
manner that affirmatively furthers fair housing (AFFH); (2) ensure that 
the right to return to communities is not conditioned on returning to 
high-risk area; (3) ensure that grantees are using funding to redress 
historical disinvestment in infrastructure--including flood protection 
infrastructure--in low-income communities and communities of color; (4) 
carry out Department AFFH obligations and ensure that HUD holds 
grantees accountable for complying with civil rights obligations on 
which Federal funding is conditioned; and (5) ensure that subsidies, 
including Housing Assistance Payments (HAP) contracts, can be easily 
transferred to new sites and require a new assessment before HAP 
contracts are renewed following a flooding event.
    Another commenter urged HUD to consider ways to expedite the 
regulatory process for affordable housing projects, while ensuring they 
follow proposed requirements.
    HUD's Response: HUD appreciates the commenters' feedback regarding 
making floodplain housing more resilient by encouraging development 
outside the floodplain where feasible. The 8-step decision making 
process does require project sponsors to consider alternatives to any 
development plans in the floodplain. HUD encourages this alternatives 
analysis to consider other more resilient sites located outside the 
floodplain.
    While HUD does not consider this rulemaking the appropriate place 
to consider changes to disaster assistance funding or other HUD 
programs, HUD appreciates the commenters' enthusiasm for Federal 
assistance directed towards increasing affordable and resilient 
housing. HUD notes that individual HUD programs may introduce program 
specific guidance or policy to more efficiently implement FFRMS 
requirements.
F. Question #7: Feedback on the Proposed FHA Single Family Minimum 
Property Standards
    A discussion of the comments received regarding the FHA single 
family Minimum Property Standards can be found in this Public Comments 
section of this final rule in the subsection titled Minimum Property 
Standards for 1-4 unit residential structures.
G. Question #8: Whether Provisions of the Proposed Rule Will Redress, 
Perpetuate, or Create Any Disproportionate Adverse Impact Against Any 
Group Based on Race, National Origin, Color, Religion, Sex, Familial 
Status, or Disability, as Well as How HUD Can Further Incorporate 
Equity Considerations Into This Proposed Rule To Help HUD Meet Its 
Affordable Housing and Community Development Mission
1. Proposed Rule Promotes Equity
    Several commenters stated that the proposed rule's blended climate 
and equity lens will contribute to redressing disproportionate adverse 
impacts faced by protected classes; and that allowing communities of 
color and low-income communities to endure elevated flood risk would 
perpetuate systemic inequalities.
    Several commenters specifically supported requiring inclusion of 
environmental justice public engagement in the 8-step decision making 
process. Several commenters added support for HUD's plan to issue 
policy guidance on environmental justice.
    Several commenters stated that replacing the misleading 1-percent-
annual-chance flood approach with the CISA approach will ensure more

[[Page 30874]]

accurate accounting for hazard risks to federally assisted housing. One 
commenter explained that this is essential to promote wealth retention 
in Black, Hispanic, Indigenous, and low-income communities harmed by 
centuries of inequitable resource allocation and exposure to natural 
and artificial hazards, including heightened exposure to hazardous 
flooding and inequitable distribution of disaster aid.
    HUD Response: HUD appreciates the commenter's feedback regarding 
climate and equity. It is the Department's goal to fully implement the 
goals and objectives of E.O. 14096, including to identify and address 
disproportionate and adverse human health or environmental effects of 
the Department's programs, policies, and activities on communities with 
environmental justice concerns, while also working to be more 
protective and promote resiliency to flooding. HUD agrees with the 
commenter's sentiment that CISA should help to better account for and 
reduce hazard risks to federally assisted housing. HUD also agrees that 
housing is an essential component to generational wealth building and 
that ensuring its resilience in the face of flooding helps communities 
build into the future.
2. Proposed Rule Perpetuates or Creates Disproportionate Adverse 
Impacts on Protected Classes
a. Inequities Perpetuated by Continued Development in High-Risk Areas
    Several commenters raised concerns with provisions of the proposed 
rule that they assert would perpetuate or create disproportionate 
adverse impacts on protected classes, citing evidence showing the 
following: a disproportionately high percentage of low-income, 
minority, and other communities that are vulnerable to flooding live in 
high-risk areas; communities of color face disparate adverse impacts of 
flooding (both in rate of flooding and damage caused by flooding), as 
well as face challenges with access to post-disaster resources and 
rehabilitation. One commenter cited evidence that flood risk will 
increase by 26 percent by midcentury and would be disproportionately 
high for Black communities, with population growth in flood-prone areas 
accounting for 75 percent of that increased risk (and 19 percent caused 
by climate-related flood impacts).
    Several commenters asserted that even with the administrative steps 
of Sec.  55.20, the exemptions in part 55 allowing continued housing 
development in high-risk areas will perpetuate and create 
disproportionate adverse impacts on several protected classes of 
people, especially considering that its primary application is 
subsidized housing units. Several commenters noted that along with 
placing residents in danger, this will cause HUD and other public 
entities to spend limited resources on disaster recovery for all 
citizens, taking away from investments in affordable housing and 
programs to redress historical disparities. Several commenters cited 
FEMA risk data that 32 percent of federally assisted housing stock (1.5 
million housing units) is at high risk of negative impact for natural 
hazards, compared to 24 percent of market rent homes and 14 percent of 
owner-occupied homes. These commenters noted that underestimates in 
FEMA's 1-percent-annual-chance flood hazard measurements mean that many 
more federally assisted homes are at risk, which supports the need for 
the new FFRMS standard to better assess risk. Another commenter 
presented evidence on how maladaptation measures--such as new 
infrastructure that cannot be improved without significant investment--
entrench inequities.
    One commenter explained that racial disparities in flood 
vulnerability are a direct result of local, State, and Federal 
exclusionary policies and practices, perpetuated by this rule. This 
commenter asked HUD to revise the 8-step decision making process to 
directly account for historical patterns and practices of affordable 
housing placement. This commenter caveated their response by adding 
that HUD must continue to provide funding to rehabilitate and improve 
the resilience of existing subsidized units in high-risk areas and 
honor residents' right to return to prevent post-disaster displacement.
    This commenter also emphasized that households with low incomes are 
negatively impacted by flooding even if all mitigation and 
floodproofing measures are taken. The commenter explained that flooding 
damage takes a variety of forms such as the destruction of vehicles and 
personal property, toxins spread by floodwaters, and disruption of 
employment or childcare. As such, people with low incomes may 
experience significant negative impacts from flooding that are not 
related to damage to a housing unit. The commenter added that FEMA is 
shifting resources away from ``small disasters,'' reducing the 
resources available for replacing personal property, and that residents 
of homes built in FFRMS floodplains will continue to be significantly 
impacted even with the floodproofing and mitigation steps outlined in 
this proposed rule.
    Several commenters asserted the alternative processing for existing 
nonconforming sites under Sec.  55.21 will perpetuate or exacerbate 
inequalities. One commenter explained that exceptions are typically 
granted based on the condition under Sec.  55.21(a)(1) that it's not 
``practicable to transfer . . . under existing program rules, financial 
limitations, and site availability,'' by relying on historical 
discriminatory policies and practices that resulted in the 
disproportionately high rates of affordable housing in the high-risk 
locations. Providing two examples of HUD supporting development repair 
in unsafe areas, this commenter argued that HUD cannot excuse its 
obligation to redress discriminatory government policies and practices 
because those policies have, for example, increased property values in 
lower risk areas. Another commenter asserted that HUD failed to support 
the existing non-conforming sites with evidence that the floodway and 
adjacent areas will be safe over the next 20-40 years, also the 
relevant term of years for several listed forms of HUD assistance. This 
commenter referenced four HUD Inspector General reports finding 
problems with HUD's assessment of environmental and health risks. This 
commenter posed the following questions to HUD as important 
considerations in understanding the impacts of this provision on 
protected classes:
    (1) Did HUD perform analysis on potential complete impacts related 
to floodways?
    (2) How will the floodway analysis occur on an individual site 
basis?
    (3) How is HUD projecting floodway expansion related to increased 
atmospheric water vapor over coming decades?
    (4) How will HUD use climate science to project floodways' 
potential instability?
    (5) How will HUD's site analysis consider climate-induced increase 
in pluvial flooding?
    (6) How will HUD's site analysis consider potential sea level and 
associated groundwater rise?
    (7) What is the universe of these floodway projects?
    (8) What is HUD's estimate of how many HUD-assisted projects have 
buildings in floodways?
    (9) How many similar projects has HUD found with floodway impacts?
    (10) What racial equity and environmental justice considerations 
did HUD account for in drafting this provision?

[[Page 30875]]

    (11) How will racial equity and environmental justice analysis 
apply to individual sites?
    Another commenter asked HUD to address its decision to allow public 
housing residents to stay in or near a floodway in a rule acknowledging 
the dangerous and increasing impacts of climate change.
    Another commenter added that stronger protections would lessen 
reliance on HUD to rebuild and replace community assets damaged by 
natural disasters, which currently divert funds away from programs 
targeting low-income families, aging populations, and persons with 
disabilities.
    HUD Response: HUD appreciates the commenter's concern that many 
low-income communities and communities of color live in higher risk 
areas in and around floodplains. HUD believes that this rule supports a 
greater resilience within these communities to flooding and other 
related disasters, thus avoiding loss of services during disasters and 
any disparate adverse impacts. Resilient infrastructure helps to 
counteract entrenched inequalities by providing communities with 
resilient services through floods. HUD believes that a policy which 
bars development in the FFRMS floodplain would be too restrictive and 
have a significant negative impact on affordable housing availability. 
By allowing limited development and requiring flood risk mitigation 
equitably across the FFRMS floodplain through this rule, HUD believes 
substantial risk reduction can occur without substantial impact on 
housing affordability for all communities across the Nation who face 
flood risk. HUD agrees with commenters that the FFRMS standard is 
needed to better assess risk for Federal projects.
    Separate from this rulemaking, a critical part of HUD's mission is 
to fully implement the Fair Housing Act, which not only prohibits 
discrimination but also directs HUD to ensure that the Department and 
its program participants proactively take meaningful actions to 
overcome patterns of segregation, promote fair housing choice, 
eliminate disparities in housing-related opportunities, and foster 
inclusive communities that are free from discrimination. In keeping 
with this mission, HUD also notes that under the new rule, Sec.  
55.20(b)(4) requires that any activity in a community with 
environmental justice concerns must coordinate its consultation and 
decision making from Sec. Sec.  50.4(l) and 58.5(j). HUD disagrees that 
this rule perpetuates exclusionary policy that exacerbates racial 
disparities in vulnerable communities. HUD is working on fully 
implementing the goals of E.O. 14096 on revitalizing the nation's 
commitment to addressing environmental justice, which includes 
implementing practices that address or prevent exacerbating disparities 
in vulnerable or other affected local communities, along with other 
relevant E.O.s. In keeping with the goals of E.O. 14096, this rule will 
align other HUD programs with existing disaster recovery program 
requirements for elevation and will continue to allow projects to 
proceed in the floodplain so long as mitigation is incorporated into 
the project scope. HUD believes this alignment will help to increase 
the resiliency of vulnerable communities in high-risk areas.
    HUD appreciates that no flood mitigation except for buyouts is 
entirely safe over time and that some households with low incomes can 
be negatively impacted despite the best mitigation efforts. The RIA 
considered the benefits of losses avoided from flooding. While HUD 
maintains no authority over FEMA's disaster assistance efforts, it is 
the objective of HUD for this rule to significantly improve resilience 
of newly built structures in the floodplain.
    HUD appreciates the specific questions provided by commenters 
regarding implementation of the rule and will work to address these 
questions through future guidance. Regarding increases in atmospheric 
vapor and the expansion of the floodway, HUD relies on FEMA to 
determine and define the floodway as part of its FIRM process. HUD also 
intends to continue to rely on CISA data as it becomes more readily 
available. Over the next 20-40 years, HUD anticipates a significant 
development in flood resilience data, which will bolster the 
availability of CISA data nationwide. This in turn will result in 
better flood resilience outcomes. HUD notes that the rule's RIA 
contains equity and environmental justice analyses.
b. Concerns With the Public Notice and Community Engagement 
Requirements
    Several commenters urged HUD to go beyond proposed public 
engagement and notice requirements in the proposed rule, mandating more 
accessible and transparent public notice to prospective buyers and 
renters in floodplains; community-led planning and decision making; and 
full accounting for long-term and indirect risks. These commenters 
reiterated that community engagement in planning and the floodplain 
hazard notice is a critical requirement that will allow for informed 
decisions but identified issues that they believe will perpetuate 
inequalities.
    Several commenters stated the proposed 8-step decision making 
process and transparency requirements only account for short-term, 
direct damages of flooding and must be improved to account for long-
term and indirect safety risks to those considering living in flood-
prone areas. One commenter specified several indirect harms of flood 
events that have a disproportionate impact on marginalized communities 
not addressed by the proposed mitigation and floodproofing measures--
toxins spread through floodwaters; disruption of employment, education, 
healthcare access; and infrastructure damage. More broadly, another 
commenter urged HUD to specifically account for the holistic cost of 
homeownership/rental value over the life of a home in assessing 
economic impact of requirements and disparate burdens throughout this 
rule, including the cost to live in, maintain, and insure a home over 
time, especially homes subject to recurrent natural disasters that may 
become uninhabitable. This commenter cited several sources finding that 
race, ethnicity, physical disability, and age are factors that 
significantly impact disaster vulnerabilities.
    Another commenter urged HUD to amend Sec. Sec.  55.20(f)(2)(iii) 
and 55.4 to ensure that environmental justice reviews require both 
public participation and a substantive analysis of the proposed action 
to ensure it does not overly burden existing communities. This 
commenter opposed exempting environmental justice outreach when data or 
mapping does not identify a particular community of concern. This 
commenter asserted that such flexibility: (1) incentivizes developers 
to save money by foregoing robust environmental justice review 
alongside communities historically underrepresented by land use 
decisions; and (2) shifts the burden onto community members. 
Specifically, this commenter urged HUD to delete the parenthetical ``if 
conducted'' from Step 6 under Sec.  55.20(f)(2)(iii). This commenter 
stated that this proposed revision aligns with other HUD guidance, such 
as the environmental justice worksheet.
    This commenter also asked HUD to amend Sec.  55.4, Sec.  50.23, 
Sec.  58.43, or Sec.  58.59 by adopting language access requirements 
from the voting rights context to ensure that immigrant and other non-
English speaking communities have access to hazard notifications and 
can participate in community engagement. This commenter recommended 
that HUD model requirements after Section 203 of

[[Page 30876]]

the Voting Rights Act, stating that materials must be provided in 
alternative languages where, according to the U.S. census, citizens of 
voting age: are more than 10,000, or more than five percent of all 
voting age citizens, or on an Indian reservation, are more than five 
percent of all reservation residents; and the illiteracy rate of the 
group is higher than the national illiteracy rate. Additionally, this 
commenter urged HUD to amend Sec.  55.20(b)(2) to allow at least a 
sixty (60) calendar day comment period, which this commenter stated 
will create no additional delay or economic harm, while providing 
necessary opportunity for public awareness.
    Another commenter asked HUD to add notification requirements for 
actions involving repossession, receivership, foreclosures, and similar 
property acquisitions; and where issuance of rental subsidies is not 
associated with a project. This commenter reasoned that that HUD-
associated foreclosed homes are often resold with scant information.
    Another commenter urged HUD to strengthen the flood risk management 
and project design criteria in the following ways: (1) mandate 
proactive outreach to affected communities; (2) require both early 
resident and community leader engagement and engagement carried forward 
throughout project design and implementation; and (3) specify that 
communities' lived experiences--regarding community priorities, 
intended uses, flood susceptibility, and population specific concerns--
are given equal weight as technical modeling in flood mitigation 
options assessments. This commenter reasoned that co-producing these 
assessments and planning processes will make residents more likely to 
support projects and help to address any obstacles, improve community 
understanding of flood risks and how they can individually prepare, and 
reinforce a sense of community.
    Another commenter encouraged HUD to include additional flood 
insurance resources for those who may have difficulty understanding 
these insurance policies.
    Another commenter urged HUD to amend Sec. Sec.  55.20(f)(2)(iii) 
and 55.4 by incorporating other agencies' guidance (e.g., the EPA Legal 
Tools to Advance Environmental Justice) and to define the substantive 
analysis necessary in an environmental justice review. For example, 
this commenter stated that environmental justice reviews must also 
require mitigation or an alternatives analysis if a project will have 
harmful impacts on the community. This commenter also stated that 
review must account not only for flood risk, but also for the 
intersecting and cumulative risks from all environmental hazards and 
disparate impacts, including discriminatory zoning, hazardous uses, 
disinvestment in infrastructure, and housing discrimination.
    Several commenters stated that while allowing online posting 
improves accessibility in some ways, it still puts the onus on 
residents to identify projects that may affect them.
    One commenter asked how HUD plans to remove barriers that low-
income and protected stakeholders face that may make it more difficult 
for them to participate stakeholder meetings.
    HUD Response: HUD appreciates the commenters' sentiment for greater 
accessibility and transparency for public notices to prospective buyers 
and renters in floodplains. HUD agrees that greater notification 
standards can allow for buyers and renters to better account for those 
risks when considering flood insurance. Additionally, HUD agrees that 
greater community engagement in planning and floodplain hazard notices 
is a critical component of the 8-step decision making process. HUD 
believes that the increased notification requirements for buyers and 
renters, along with more acceptable methods of public noticing for the 
8-step decision making process found in the rule, will create the 
greater transparency and accessibility of vital floodplain information 
without creating undue regulatory burdens on already limited funding 
for projects.
    HUD believes that Step 4 of the 8-step decision making process 
specifically requires responsible entities to look at direct and 
indirect impacts of building their project in the floodplain or wetland 
and that the requirements in the rule and the existing 8-step decision 
making process are not limited to the short-term impacts of living in 
flood-prone areas.
    While HUD appreciates the comments on economic impacts associated 
with living in the floodplain, it would be inappropriate under the rule 
for HUD to address the holistic cost of home ownership in areas prone 
to natural disasters. There are innumerable potential influences of the 
holistic costs and indirect safety risks associated with homeownership/
renting and it is impossible to account for all possible factors. HUD 
feels strongly that the RIA analyzes all relevant costs and benefits 
associated with this rulemaking. HUD appreciates the commenters' 
feedback that environmental justice reviews should be included more 
broadly, applying additional study and review is something the 
Department may consider in the future, contingent on the availability 
of resources. HUD also notes that consideration of environmental 
justice is a requirement for grantees under Sec.  58.5(j), consistent 
with HUD's policy goals, including pursuant to E.O. 14096, as well as 
the consideration for environmental justice requirements under NEPA. 
HUD notes that responsible entities are required to complete an 
acceptable 8-step decision making process, that public input must be 
captured throughout that process, and that such process avoids placing 
the burden of compliance on community members.
    HUD agrees that providing language from the Voting Rights Act or a 
60-day public comment period could further public awareness. However, 
HUD believes that using requirements similar to Section 203 of the 
Voting Rights Act and quadrupling the required public comment period 
would cause significant economic harm to projects ready to complete 
environmental reviews and move towards construction. Additionally, 
while HUD would encourage grantees to utilize the tools of Federal 
partners in the completion of their environmental justice reviews, HUD 
has no plans to mandate the use of any particular tool for 
environmental justice analysis with this regulation as no one tool is 
suitable for every type of project HUD funds.
    Under Sec.  55.4 of the final rule, HUD-acquired properties sold 
after foreclosure would include the same notification requirements as 
those sold in other manners even where no rental subsidies were 
applied. HUD contends that the final rule will cut down on the 
properties sold where little information on flood hazard status was 
available so that homebuyers could make better informed decisions.
    HUD notes that public participation in planning and implementation 
projects subject to review under NEPA is strongly encouraged. HUD 
believes that communities need to play a substantive role in the 
development of these plans and implementation of these actions because 
helps to ensure those communities are taking positive steps to be a 
part of their own solutions. That said, while HUD appreciates accounts 
of community members' lived experiences, flood modeling and mapping 
based on the standards described in this rule, like the FFRMS Federal 
agency tool in development by the White House Flood Resilience 
Interagency Working Group and the FFRMS Science Subgroup, with input 
from CEQ, OSTP, FEMA, NOAA, and HUD, is expected to be available at a 
consistent and nation-wide scale.

[[Page 30877]]

    HUD appreciates the commenters' feedback regarding flood insurance 
resources for homeowners and notes that while this rule does not 
require flood insurance to be obtained beyond the FEMA-mapped 1-
percent-annual-chance floodplain, it does encourage it. As has always 
been the case, grantees may extend additional requirements for flood 
insurance beyond the HUD minimum. Additionally, many HUD programs, like 
CDBG-DR, do allow for flood insurance to be subsidized for a period 
where it is a required mitigation post construction completion.
    HUD appreciates the commenters' feedback that online posting 
improves accessibility for public noticing. HUD suggests that project 
sponsors work with their regional HUD representatives to help them 
achieve greater levels of accessibility and remove any other barriers 
their potentially affected project populations may face in their 
attempts at participation in the 8-step decision making process.
c. Program Standards
    Several commenters pointed to disparate standards and requirements 
that they assert will exacerbate disproportionate adverse impacts on 
affordable housing residents and communities of color.
    One commenter urged HUD to adopt the same higher floodplain 
management standards Department-wide, stating that not expanding higher 
standards across HUD programs may exacerbate inequalities.
    Another commenter offered a direct and specific critique of the 
higher floodplain management standards FHA-insured market rate 
multifamily housing is subject to under the MAP Guide as compared to 
public housing. This commenter also urged HUD to increase resilience 
for manufactured housing residents (e.g., facilitating public 
investments in adaptation projects, mandating stricter building codes, 
increasing access to disaster recovery funds, and incentivizing siting 
manufactured housing on safer areas).
    HUD Response: HUD contends that this rule will have a beneficial 
impact on communities at greatest risk for flooding and that making 
those communities resilient in the face of climate change will help 
them continue to thrive in the future. Furthermore, HUD believes that 
the requirements in this rule will not have a disproportionate adverse 
impact on affordable housing residents and communities of color.
    HUD appreciates the commenters' concerns regarding higher 
floodplain standards Department-wide beyond those programs covered by 
the Minimum Property Standards. The vast majority of other HUD programs 
are subject to floodplain management standards laid out in the 
revisions to part 55. While some HUD programs have historically 
implemented higher floodplain management standards, all HUD programs 
subject to part 55 will now be required to implement the same more 
protective FFRMS standard. Following implementation of the final part 
55 and part 200 rules, HUD programs may issue program-specific guidance 
to implement these more protective requirements.
    While HUD agrees with the commenter that FHA insured multifamily 
programs are currently subject to the standard from the MAP Guide and 
thus, a higher standard than public housing programs which are subject 
to part 55, HUD notes that the part 55 revisions align floodplain 
management standards across these programs--both FHA insured 
multifamily and public housing programs will be subject to the FFRMS 
floodplain management requirements.
    HUD appreciates the commenter's feedback regarding increasing 
resilience for manufactured housing residents. It should be noted that 
under part 55, HUD has historically considered MHUs as site-built 
housing and therefore subject to the same part 55 requirements under 
various HUD programs. Part 55 does not apply to FHA's Single Family 
insured mortgage programs. In this final rule, HUD has made a small 
revision to clarify the Department's historical position that using HUD 
assistance for the new siting of MHUs has the same environmental 
requirements as building and substantially improving site-built housing 
under 24 CFR part 55.
d. Concerns About Disparate Impacts on Housing Supply
    Several commenters raised concerns that restricting affordable 
housing development and rehabilitation in floodplains, along with a 
lack of elevation data available to establish the FFRMS, will 
disproportionately harm low-income and rural communities who are less 
likely to be able to afford relocation outside floodplains, unless HUD 
provides additional funding and waivers and increases the per-unit 
maximum limits. One commenter urged HUD to provide waivers for those 
most impacted by the rule's curtail of development. Another commenter 
stated that HUD should consider a practical alternative for developing 
in floodplains in these areas to avoid excluding rural communities in 
need of affordable housing.
    HUD Response: HUD believes that to align with the goals of E.O. 
13690 and E.O. 11988, Federal investment should not place vulnerable 
populations in risky flood-prone environments and promoting development 
in the floodplain will place harm on low-income populations. Federal 
investment in the construction of multifamily and/or public housing in 
riskier areas prone to flooding does not increase the availability of 
safe affordable housing units. It is HUD's goal to disincentivize 
continued Federal investment in high-risk flood-prone areas. HUD 
encourages grantees to seek practicable alternatives to development in 
floodplains through the 8-step decision making process.
3. Suggestions How HUD Can Further Incorporate Equity Considerations 
Into This Proposed Rule
    Several commenters recommended that HUD prohibit use of fill dirt 
to achieve elevation requirements to avoid the damaging consequences of 
stormwater runoff on adjacent properties and communities, which are 
often lower-lying and most vulnerable. One commenter stated that where 
fill is necessary, HUD should require projects to retain the volume of 
water on site equivalent to the volume of fill used.
    Several commenters asked HUD to provide additional and inclusive 
opportunities for communities historically disproportionately affected 
by flooding to provide feedback to the Department, during and beyond 
the public comment period.
    One commenter asked that outreach include: clear communication of 
implementation timelines; broad and extensive training for public 
officials and stakeholders; and stakeholder partnerships across 
mitigation, housing, land use, floodplain management, and education 
sectors focused on engineering, architecture, and environmental science 
curricula nationwide. This commenter explained that education and clear 
implementation timelines are essential to prevent potential negative 
real-estate market impacts, especially in communities that already 
experience disproportionate adverse impacts of flooding. Another 
commenter asked HUD to provide additional detail and public engagement 
on how HUD will consider environmental justice impacts of Department 
actions.
    Several commenters urged HUD to provide additional financial and 
robust technical assistance targeted to communities of color and low-
income communities to help offset costs and break down barriers to 
implementing the rule. One commenter encouraged

[[Page 30878]]

HUD to provide (or require housing authorities to provide) renters 
insurance, property recovery assistance, and temporary housing, 
prioritizing Black, Hispanic, Indigenous, and low-income communities 
that experience disproportionate impacts of climate change and 
inequitable access to the resources to rebuild after disasters. This 
commenter reasoned that because renter's insurance is often more 
expensive in low-income communities and communities of color and HUD 
programs do not require insurance, these communities often experience 
property loss that resonates for generations, whereas higher-income 
people are more likely to be made whole. Further, this commenter 
explained that critical disaster recovery resources are often denied 
to, or delayed in reaching, marginalized communities.
    Another commenter urged HUD to commit substantial funding and staff 
to the following actions to ensure equity goals are met: communicating 
flood risks, potential loss, and environmental justice implications 
across its portfolio and monitoring and enforcing implementation and 
compliance.
    One commenter described the requirement to coordinate the 8-step 
decision making process with public engagement associated with 
environmental justice as a good first step in working towards 
considering environmental justice impacts, which must be paired with 
greater affordable housing development outside of the floodplain. This 
commenter encouraged HUD to proactively provide buyout funding with 
relocation assistance for repetitive loss properties.
    HUD Response: HUD does not mandate how a structure may be elevated 
and leaves that authority to local jurisdictions who have a better 
understanding of the necessary engineering needed for foundations in 
their area. This is also true with regard to the needs of the community 
when it comes to water runoff from properties.
    HUD will continue to work with our local partners and stakeholders 
to ensure the best possible technical assistance and support can be 
provided which helps our partners achieve efficient, compliant, and 
effective floodplain management. HUD intends to provide specific 
technical assistance to responsible entities to ensure a smooth 
transition to any new requirements. HUD agrees that clearly 
communicated requirements and implementation timelines are a necessary 
part of any successful regulatory update.
    HUD notes that the rule does maintain but does not expand 
previously instituted flood insurance requirements for HUD projects 
within the 1-percent-annual-chance floodplain. HUD strongly encourages 
flood insurance for projects located in the FFRMS floodplain to 
minimize financial losses, but it is not mandated. HUD or the 
responsible entity may also require flood insurance beyond the minimums 
established by the FDPA when necessary to minimize financial risk. 
Renter's insurance does not generally cover floods and is not 
considered a requirement under the rule.
    HUD appreciates the commenters' sentiment that additional funding 
should be made available to HUD to ensure flood risks are adequately 
addressed throughout its portfolio. Should funds be congressionally 
appropriated for flood resilience, HUD would enthusiastically utilize 
them.
Definitions
A. General Comments on Definitions
    Some commenters requested that HUD ``put all definitions at the top 
of 24 CFR part 55.''
    HUD Response: HUD intends to maintain the format and structure of 
part 55. As such, the definitions section will be maintained in its 
current location at Sec.  55.2 and not relocated to Sec.  55.1.
B. ``Critical Action'' Definition at Proposed 24 CFR 55.2(b)(3)
    One commenter found the definition of ``critical action'' in Sec.  
55.2 to be vague. The commenter said this vagueness would make it 
challenging to align with the standards set forth in this proposed rule 
and recommended revising the definition, both to make it clearer as to 
what facilities would be included and to expand its reach.
    Several commenters supported the inclusion of ``community 
stormwater management infrastructure'' and water treatment plants under 
the ``critical action'' definition. Other commenters requested that HUD 
define ``community stormwater management infrastructure.'' Commenters 
said that if the definition includes any stormwater development 
associated with multifamily construction, including offsite, the 
definition could be applied to any site at or below the 0.2-percent-
annual-chance floodplain elevation, based on the definitions for FFRMS 
included in the proposed language.
    HUD Response: HUD's definition for ``critical action'' comes from 
E.O. 11988 and guidance issued by the Federal Interagency Floodplain 
Management Task Force and is considered the same definition for these 
actions by Federal agencies and departments. As such, HUD has 
determined that the definition is sufficient to provide guidance and 
flexibility as needed for practitioners to implement the rule as it 
stands and disagrees that a definitive list is necessary or advisable.
    HUD disagrees that the definition of ``community stormwater 
management'' could be applied to any stormwater development associated 
with multifamily construction. As discussed in the proposed rule, the 
revised definition of critical actions specifically references water 
treatment plants as examples of a utility or service that would be 
considered as critical actions. This makes evident that the change is 
intended to focus on larger infrastructure level projects and not 
smaller upgrades to most individual structures.
C. ``FFRMS Floodplain'' Definition at Proposed 24 CFR 55.2(b)(4)
    One commenter suggested including a very clear definition of what 
is meant by the ``horizontal floodplain'' for each approach where it 
applies. The commenter went on to suggest that New York State's 
guidance document for the Community Risk and Resiliency Act could 
provide model language.
    Another commenter expressed concern that HUD is proposing to use a 
different definition of ``floodplain'' than is used by FEMA to 
establish FIRMs. The commenter urged HUD to consider applying 
terminology and standards consistent with FEMA's. Another commenter 
asked HUD to clarify if the definition of floodplain applies to a FEMA-
recognized 1-percent-annual-chance floodplain or the HUD-recognized 
FFRMS floodplain. This commenter said that assuming the latter, this 
represents additional administrative burden and can result in reduced 
property values compared to similarly located multifamily properties.
    HUD Response: HUD appreciates the commenters' suggestion to use the 
New York State guidance on Community Risk and Resiliency Act as a model 
for the horizontal floodplain definition. Additionally, HUD understands 
that some people may have a hard time visualizing what the horizontal 
extent of a floodplain is without maps created by FEMA. As such, HUD 
intends to create implementation guidance that includes supportive 
materials and references to existing tools, such as the FFRMS 
Floodplain Determination Job Aid,\40\ to help individuals identify and 
visualize

[[Page 30879]]

the horizontal extent of the FFRMS floodplain.
---------------------------------------------------------------------------

    \40\ See https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf.
---------------------------------------------------------------------------

    Under Executive Orders 13690 and 14030, HUD, like all Federal 
agencies, is directed to update its floodplain regulations to be 
consistent with the FFRMS. Though all agencies are required to comply, 
not all are able to comply at the same pace. HUD continues to work 
closely with our interagency partners to ensure that our rules are as 
aligned as possible and that tools developed by NOAA and FEMA are 
compatible with our regulatory framework. HUD and FEMA continue to work 
closely together in these efforts to ensure consistency of guidance. In 
addition, FEMA has already begun implementation of the FFRMS, in part, 
through policy and guidance, thereby this regulatory revision will 
better align with FEMA's current approach to FFRMS requirements.
D. ``Impervious Surface Area'' Definition at 24 CFR 55.2(b)(9)
    One commenter stated that runoff coefficients vary greatly among 
surfaces, including lawn and other surfaces not generally associated 
with ``impervious surface.'' The commenter recommended that when 
calculating the effects of projects on receiving waters, metrics be 
utilized to assess the pre- and post-project runoff calculations to 
determine appropriate mitigative efforts to minimize impacts to 
receiving waters and downstream communities.
    Another commenter noted that it can be difficult to define whether 
an entire area is an ``impervious surface'' because some parts of the 
area fit the definition and some do not. The commenter asked how such a 
situation would affect the management of an area.
    HUD Response: HUD appreciates the commenters' feedback regarding 
runoff coefficients. HUD policy recommends that project sponsors 
utilize experts to help them implement effective mitigation activities 
for all projects with potential to impact wetland and floodplain 
resources. Professional engineers utilizing best available data and 
current best practices are recommended where appropriate. These experts 
can also help determine how permeable various materials are and where 
they can best be used to mitigate a layered landscape. Additionally, 
HUD requires the 8-step decision making process to outline necessary 
mitigations to avoid impacts and to examine practicable alternatives to 
the project. Because the 8-step decision making process also outlines a 
public engagement requirement, the public can weigh in on a proposed 
project to comment on the impervious surface area and its impacts.
E. ``Wetlands'' Definition at Proposed 24 CFR 55.2(b)(13)
    Many commenters wrote to support expanding the definition of 
wetlands. One commenter said that with the expanded definition, HUD can 
more safely and sustainably carry out its mission in a more streamlined 
manner. Another commenter reasoned that the expanded definition would 
provide benefits for soil retention by avoiding flooding. This 
commenter went on to say that there is greater specificity in how soils 
may determine which areas are wetlands but that the new definition is a 
good starting point.
    Another commenter stated that the definition of ``wetlands'' in the 
proposed rule is very similar to the definition in the 1987 Army Corps 
of Engineers manual, which is employed by the Clean Water Act (CWA) 
Section 404 regulatory program and Natural Resources Conservation 
Service. However, the commenter says that such definition does not 
capture all areas performing wetland functions that benefit storm flow 
augmentation and enhance resiliency.
    The commenter argued that the part of the proposed definition that 
states ``This definition includes those wetland areas separated from 
their natural supply of water as a result of activities such as the 
construction of structural flood protection methods or solid fill 
roadbeds and activities such as mineral extraction and navigation 
improvements,'' is unnecessary since the wetland definition is based on 
``in-situ'' information rather than geographic location or genesis. The 
commenter said it is also not clear why the rule states that ``This 
definition includes both wetlands subject to and those not subject to 
Section 404 of the Clean Water Act as well as constructed wetlands.''
    This commenter suggested that the linkage of wetlands defined under 
this proposed rule and Section 404 of the CWA, or the Food Securities 
Act, be removed and that a functional analysis methodology be employed 
for aquatic resources proposed to be impacted by HUD actions. The 
commenter said this method would better protect communities and natural 
infrastructure from the effects of climate change and better preserve 
those resources functioning to the benefit of the watershed. This 
commenter further explained that while there are resource areas which 
may ``overlap'' with other Federal, State, and Tribal regulatory 
programs, it is worth noting that the intent should be the broad 
protections of floodplains and their function to ameliorate the effects 
of climate induced flooding and not merely to replicate Federal program 
standards.
    Several commenters expressed support for a uniform definition of 
``wetlands'' across Federal agencies to avoid inconsistent and 
unpredictable wetland delineations and ultimately unequal application 
of mitigation measures. Several commenters said wetlands would likely 
be better protected if the definition of wetlands among Federal 
agencies could be consistent. Several commenters stated that human 
error based on misunderstanding of what a wetland is likely results in 
compliance issues related to unauthorized filling of wetlands.
    One commenter argued that HUD should follow the U.S. Army Corps of 
Engineers and EPA definition of ``wetlands.''
    Other commenters wrote that HUD should use the consistent 
definition of a wetland as defined by the NWI.
    Several commenters recommended a clarifying change to the 
definition of ``wetlands.'' The commenters stated that the definition 
does not differentiate between ephemeral, intermittent, or perennial 
streams. They asked HUD to please include the definition of deep-water 
aquatic habitat in the final rule as it would be helpful to avoid 
confusion as to whether these mentioned aquatic resources qualify as 
wetland.
    HUD Response: While HUD appreciates the commenters' feedback 
regarding a broader definition of wetland, it should be noted that the 
rule does not change HUD's definition of a wetland, it merely clarifies 
its existing policies that describe wetlands as being more than what is 
identified on an NWI map. HUD generally agrees that soil profiles can 
be helpful in determining if a wetland may be present on a site; 
however, HUD, like many Federal agencies, bases its definition of a 
wetland on the definition found in Executive Order 11990. As such, many 
agencies have similar definitions. HUD believes that its definition is 
sufficient to capture the sensitive areas which are protected under its 
rules.
    While HUD agrees that a functional analysis model could be useful 
in limited circumstances, the benefits are outweighed by the general 
complexity of the approach. HUD does not want the rule to be burdensome 
to its grantees in a way that could limit funding towards necessary 
programs.
    HUD disagrees that all Federal agencies should utilize the same 
definition for wetlands and that HUD's

[[Page 30880]]

definition should be dependent solely on the NWI. Not all Federal 
agencies fund projects with the same level of potential impact and HUD 
projects are rarely subject to the permitting requirements of the Clean 
Water Act. HUD feels that its definition of wetlands is therefore more 
appropriate for the types of impacts associated with HUD projects.
    HUD amended its definition of wetlands to remove reference to 
things that do not constitute wetlands. This change was made both 
because it is not necessary to list things that the definition does not 
cover and avoid confusion about certain areas around deep water aquatic 
habitats that may be considered wetlands.
    HUD intends to release subregulatory implementation guidance to 
ensure responsible entities utilize compliant processes in their 
environmental reviews.
F. Recommended Additional Definitions
1. Incidental Floodplain
    Several commenters requested that HUD provide a clear definition of 
the incidental floodplain for public comment. One commenter said this 
proposed rule would maintain 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 
proposed Sec.  55.12(g). This commenter said this section would allow 
projects to proceed without completing the 8-step decision making 
process where an incidental portion of the project site includes the 
FFRMS floodplain.
    HUD Response: HUD has provided subregulatory guidance and resources 
on the HUD exchange website to illustrate requirements for approval of 
a project site, an incidental portion of which is situated in a 
floodplain. HUD agrees that the rule would maintain a narrower version 
of the existing incidental floodplain (not including floodways, coastal 
high hazard areas, or within the LiMWA) and allow those projects that 
fit under the more limited exception to proceed without completing the 
8-step decision making process as stated in Section G of the proposed 
rule. HUD has also removed Sec.  55.12(g)(3) to avoid duplication and 
to better align with both existing processes and with the new 
incidental floodway provisions at Sec.  55.8.
2. De Minimis Improvements
    Several commenters requested that HUD define ``de minimis 
improvements'' in detail.
    HUD Response: HUD notes that de minimis improvements, as the name 
implies, are improvements too trivial or minor to merit consideration. 
De minimis improvements referenced in Sec.  55.8(a)(1)(ii)(B) include 
activities that have minimal ground disturbance or placement of 
impervious surface area to ensure accessibility where permitted by 
local ordinances and where it does not increase flood risk to the 
property. HUD intends to provide guidance and technical assistance to 
help project sponsors ensure any improvements in a floodway are de 
minimis and utilize the best available engineering practices.
Compliance--New Sec.  55.6 Providing a Process To Complying With This 
Part, and New Sec. Sec.  55.8 and 55.10 on Limitations on HUD 
Assistance in Floodplains and Wetlands
A. New Sec.  55.6, Complying With Floodplain Management and Protections 
of Wetlands Regulations
    One commenter described the new Sec.  55.6 as a useful process for 
practitioners. This commenter asked HUD to strengthen compliance in the 
following ways: (1) emphasize floodplain avoidance; (2) require 
reporting on quality of functional floodplain and wetlands impacted by 
a floodplain action; and (3) develop methods for tracking cumulative 
loss of functional floodplains and wetlands.
    Several commenters asked HUD to provide the ``Roadmap to complying 
with this part'' for public comment once available.
    Several commenters urged HUD to ensure State, local, Tribal, and 
regional entities have the tools they need to comply with this proposed 
rule.
    HUD Response: HUD appreciates commenters' feedback on the new Sec.  
55.6 on complying with floodplain management and protection of wetlands 
regulations. HUD agrees that compliance can be strengthened via 
floodplain avoidance, reporting on impacts to floodplains and wetlands, 
and tracking cumulative losses. HUD believes that the 8-step decision 
making process at Sec.  55.20 implements many of these recommendations 
and HUD will continue to emphasize these best practices via existing 
and forthcoming subregulatory guidance. HUD notes that the ``roadmap to 
complying with this part'' is the new Sec.  55.6 language itself that 
was published for public comment. HUD will continue to support local 
government and Tribal entities and commits to providing additional 
guidance and resources to aid in regulatory compliance.
B. New Sec. Sec.  55.8 and 55.10, Limits to HUD Assistance in 
Floodplains and Wetlands
    Several commenters expressed support for proposed Sec.  55.8(c) 
requiring that HUD or the responsible identity address severe 
repetitive loss (SRL) properties.
    One commenter urged HUD to pay close attention to rehabilitation of 
multifamily units where residents have needed evacuation and rescue by 
emergency personnel (in addition to those who have lost property and/or 
experienced displacement). This commenter recommended that HUD 
prioritize protections that break the cycle of loss faced by residents, 
particularly in communities where SRL properties comprise a significant 
portion of affordable housing stock. This commenter also noted that 
FEMA determined that repetitive loss is ``the single most important 
factor that affects stability of the National Flood Insurance Fund.''
    Another commenter stated the threshold for a property being 
designated as SRL is relatively low and therefore suggested that under 
proposed requirements at Sec.  55.8(c), HUD or the responsible entity 
should be required to provide this information to the third party 
conducting the 5- or 8-step review.
    Another commenter encouraged HUD to proactively designate funding 
for buyers with relocation assistance for SRL properties that will 
otherwise be subject to increasingly frequent and intense damage due to 
climate change.
    Another commenter stated that properties experiencing repetitive 
loss should be rebuilt to modern standards that mitigate flood risk.
    HUD Response: HUD agrees with commenters that Sec.  55.8(c) is an 
important provision to protect lives and property and maintain 
stability of the National Flood Insurance Fund. The intent of this 
provision is to better protect those living in communities where a 
significant portion of the affordable housing stock is comprised of SRL 
properties, particularly those who may have previously experienced 
displacement. HUD agrees that SRL mitigation requirements should be 
included in the 5- or 8-step decision making process and notes that 
Sec. Sec.  55.8(c) and 55.20(e) of the final rule require disclosure 
and implementation of FEMA identified SRL mitigation in Step 5 of the 
process. The mitigation measures identified in Step 5 may be identified 
by HUD, the responsible entity, or a third-party environmental review 
preparer.

[[Page 30881]]

    HUD does not have congressionally appropriated funds specifically 
for SRL properties, but relocation or other mitigation activities at 
SRL properties may be eligible under multiple HUD grant programs that 
fund relocation and other mitigation assistance.
C. HUD Compliance Monitoring
    Several commenters asked how HUD will monitor, enforce, and address 
violations of the proposed rule.
    One commenter posed the following specific questions about HUD's 
current and proposed monitoring practices: (1) What types, and to what 
extent, do offices outside of HUD's Office of Environment and Energy 
perform monitoring to ensure assisted properties and proposed sites do 
not occupy floodways in violation of part 55? (2) How does HUD monitor 
housing authorities outside of Community Planning and Development (CPD) 
entitlement communities for environmental compliance? (3) Outside those 
performed by HUD's Office of Environment and Energy, how does HUD 
monitor flood insurance for programs administered by FHA Multifamily, 
the Office of Disaster Recovery, and the Office of Public and Indian 
Housing? (4) What steps did HUD take following the 2015 HUD Inspector 
General report, ``Buildings at Three Public Housing Authorities Did Not 
Have Flood Insurance Before Hurricane Sandy'' to ensure compliance with 
mandatory flood insurance maintenance under the Flood Disaster 
Protection Act of 1973? (5) How will HUD exercise its oversight 
responsibility over properties approved under the proposed Sec.  55.21 
to ensure residents are not subject to flooding or repeated floods, or 
to monitor changes in the mapped floodways, especially increased flood 
risk over time? (6) Does HUD have staff with the qualifications to 
review hydrological, hydraulic, and hydrostatic threats to structures 
from floodways?
    Another commenter explained that strong code enforcement--including 
adequate staffing numbers/expertise and continuing education on code 
updates and best practices--is necessary to realize public safety and 
resilience goals, citing evidence that strong code enforcement can 
contribute to loss reduction by 15-25 percent.
    Another commenter urged HUD to commit the following to ensuring 
compliance with the FFRMS and protections: funds, additional staff, and 
a comprehensive implementation plan that strategizes data collation on 
flood risk communications and environmental justice.
    HUD Response: HUD will address enforcement and compliance with the 
rule via environmental monitoring identified at Sec.  58.77(d). HUD's 
Office of Environment and Energy conducts in-depth environmental 
monitoring and exercises quality control (via training and technical 
assistance) for the environmental review activities, including part 55 
requirements, performed by responsible entities. Program offices, 
including FHA Multifamily, Office of Disaster Recovery, and Public and 
Indian Housing are also responsible for limited environmental 
monitoring to review compliance. This includes monitoring for 
compliance with Federal flood insurance requirements for projects 
involving mortgage insurance, refinance, acquisition, repairs, 
rehabilitation, or new construction.
    HUD has floodplain and wetlands subject matter experts who will 
review and make recommendations for exemptions requested under the 
Sec.  55.21 provision. HUD may rely on project engineers, Federal 
science agencies (e.g., FEMA, U.S. Army Corps of Engineers), and other 
experts as needed, depending on the nature of the flood risk and the 
project proposed. To provide further clarity, HUD has outlined the 
specific minimum requirements to utilize the alternative process from 
Sec.  55.21 which includes removing all residential units from the 
floodway, elevating or floodproofing all buildings in the FFRMS 
floodplain where practicable, and receiving a No Rise Certification for 
any new improvements in the floodway.
    HUD agrees that code enforcement is an important piece of meeting 
public safety and resilience goals and works with its local partners to 
ensure HUD programs are compliant with local requirements. HUD also 
agrees that increased capacity to implement FFRMS via funding, staffing 
capacity, and data collection is critical and will continue to 
emphasize this need through proper appropriation and hiring channels. 
HUD is addressing the 2015 HUD OIG report referenced by the commenter 
outside of this rulemaking.
Notification of Floodplain Hazard Requirements Under 24 CFR 55.4
A. Support for Notification Requirement
    Several commenters expressed support for the proposed changes to 
notification of floodplain hazard requirements as a critical 
requirement to ensure buyers, developers, renters, and other 
stakeholders are fully informed of a site's flood risk and potential 
direct and indirect costs. One commenter explained that increased 
transparency of flood risk and benefits of flood insurance creates 
stronger consumer protection. Another commenter described the 
notification requirements as morally right.
    One commenter stated that the notice of floodplain hazard 
requirements remedies deficiencies and inconsistencies in State 
protections, explaining that 21 States have no requirements to disclose 
to prospective homebuyers past incidents of flooding, flood risk, or 
flood insurance information, and only 8 States require prospective 
tenants receive any of these disclosures.
    Another commenter explained that these requirements are 
particularly necessary for publicly subsidized housing, which 
prospective renters and buyers may assume is safe by virtue of being 
built by a public agency or housing authority and in accordance with 
Federal requirements, despite most affordable housing being located in 
vulnerable areas.
    Another commenter stated that HUD's inclusion of detailed notice 
contents requirements and lease acknowledgements will support 
consistent implementation of this protection.
    Another commenter expressed support for the new proposed Sec.  
55.6, which outlines the required process that HUD or another 
responsible entity must follow in carrying out notification 
requirements. This commenter urged HUD to commit necessary resources to 
effectively fulfill notification of floodplain risk obligations across 
its portfolio.
    Another commenter encouraged HUD to require notification as early 
in the process as possible and in a method and language appropriate to 
potentially impacted communities.
    HUD Response: HUD appreciates the commenters' support for the 
proposed changes to the notification requirements which ensure buyers, 
developers, renters, and other stakeholders can make informed decisions 
about a property's flood risk. HUD agrees that increased transparency 
creates stronger consumer protection for residents of publicly 
subsidized housing. HUD notes that the final rule adds the term ``HUD-
acquired'' to the list of property types in Sec.  55.4(b) to clarify 
that properties that had previously been 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.

[[Page 30882]]

B. Recommendations To Strengthen Notification Requirements
    Several commenters asked HUD to strengthen the rule to require that 
notifications are written in accessible, plain language that is 
tailored to impacted communities. One commenter asked HUD to amend 
Sec. Sec.  55.4, 50.23, 58.43 or 58.59 by adding language access 
requirements mirroring Section 203 of the Voting Rights Act to ensure 
that immigrant and other non-English speaking communities have access 
to hazard notifications and can participate in community engagement. 
Another commenter stated that notice should be given in as many forms/
methods as necessary to reach the community, which may include methods 
beyond government websites or newspapers of general circulation. 
Several other commenters encouraged HUD to specifically encourage 
publication in resources that are free to the public.
    One commenter recommended that notification include flood disaster 
mitigation plans. Another commenter recommended adding emergency 
preparedness information to the required notification contents on 
emergency procedures under proposed Sec.  55.4(b).
    Several commenters encouraged HUD to work with FEMA to provide 
useful information to buyers and renters about the value of flood 
insurance and resources to help people understand how flood insurance 
policies work.
    Another commenter urged HUD to revise the list of exceptions in 
Sec.  55.12 to include notification of floodplain hazard requirements 
for property transactions involving repossession, receivership, 
foreclosure, etc.; as well as HCVs and rental subsidies not associated 
with a project. This commenter reasoned that HUD-associated foreclosed 
homes are often resold with scant information.
    Another commenter asked HUD to revise the rule to apply the 
notification requirements beyond floodplain boundaries. This commenter 
explained that this suggestion is based on this commenter's experience 
during a tropical storm and projected expansion of flood risk due to 
climate change.
    Another commenter suggested expanding the effort to make sure 
prospective buyers and renters have adequate information about flood 
risk and insurance, beyond those living in the floodplain.
    HUD Response: HUD intends to provide grantees, applicants, and 
responsible entities with technical assistance and guidance which will 
help ensure that notifications are effective and compliant. HUD 
encourages any property owner to work with their tenants and ensure 
notices are communicated effectively.
    HUD guidance and trainings instruct grantees to translate 
environmental review public notice documents for relevant limited 
English proficiency (LEP) populations to meet Title VI requirements for 
LEP.
    HUD notes that while it encourages property owners to share all 
pertinent information surrounding flood risk for their properties, many 
communities do not have formal mitigation plans in place. That said, 
the rule does require evacuation information to be included along with 
ingress and egress routes.
    HUD does not intend to expand the list of exceptions at Sec.  55.12 
currently and notes that certain property dispositions are subject to 
analysis under part 55. While HUD encourages notification of flood 
risk, HUD does not intend to require that notification for properties 
outside of the floodplain. HUD encourages grantees to work with Federal 
partners and disseminate relevant information regarding flood insurance 
to those in the floodplain.
    HUD appreciates the commenters' feedback regarding the expanded 
notification requirements for renters within the floodplain. HUD 
believes the notice requirements will help without overly increasing 
the administrative burden on landlords.
C. Opposition to Notification Requirement
    Several commenters objected to expanded floodplain hazard 
notification requirements, stating that the resulting administrative 
burden on property owners and management agents could result in reduced 
occupancy at covered properties compared to similarly located housing.
    One commenter added that since regional HUD offices can also 
require flood insurance, including for properties not within the 1-
percent-annual-chance floodplain per HUD's MAP Guide, the fact that 
flood insurance is available or required does not necessarily indicate 
a property is within a floodplain. Another commenter urged HUD to 
strike ``and flood insurance is available for their personal property'' 
from renter notification requirements at Sec.  55.4(b) and ``the 
availability of flood insurance on the contents of their dwelling unit 
or business'' from conveyance restrictions for disposition of real 
property in Sec.  55.4(c)(2)(i)(B), reasoning that housing providers 
are not positioned to make definitive statements about flood insurance 
availability to renters.
    HUD Response: HUD strongly disagrees with the commenters' 
statements that notification of flood hazards to residents is a 
significant administrative burden on property owners and management 
agents. A single disclosure necessary to provide tenants the 
opportunity to make informed decisions about their flood risk is not a 
significant administrative burden especially in context of other 
information property owners/management are expected to gather when 
leasing.
    HUD disagrees also that property owners are not positioned to make 
statements about flood insurance availability for structures that they 
own. HUD encourages responsible entities and project partners to 
implement flood insurance requirements beyond the minimums established 
by the Flood Disaster Protection Act where they feel it is appropriate 
to minimize financial risk, but going beyond the minimum standard is 
not required.
D. Requests for Clarification of Hazard Notice Requirement Regulations
    One commenter asked if ``floodplain'' covered by hazard 
notification requirements under the new Sec.  55.4 means FEMA-
recognized 1-percent-annual-chance floodplains or HUD-recognized FFRMS 
floodplains. This commenter stated that if the notification of 
floodplain hazard applies to FFRMS floodplains, the additional 
administrative burden caused by this expanded application can result in 
reduced property values compared to similarly located multifamily 
properties.
    Several commenters asked HUD to provide a standard tenant 
notification form that meets the hazard notification requirements.
    Additionally, several commenters asked HUD to revise the rule to 
clarify aspects of the notification requirements, which they stated was 
necessary to carry out the requirements. Several commenters asked HUD 
to more clearly define the conveyance restrictions moved from current 
24 CFR 55.22 to the new 24 CFR 55.4. Several commenters asked for 
clearer details on the process, including: (1) the method for providing 
the notification to prospective homebuyers/renters; (2) whether the 
notification is signed; and (3) who prepares the notification.
    One commenter stated that additional guidance or specificity to 
required notification content is needed to provide any of the 
information listed (e.g., proximity to flood-related infrastructure, 
ingress and egress, flood insurance claims disclosure). Several 
commenters specifically asked HUD to

[[Page 30883]]

define what proximity must be included and what information is required 
regarding ``proximity of a site to the flood-related infrastructure.'' 
One commenter explained that property owners may not know reliable 
sources for this information.
    One commenter asked HUD what type of notice residents would receive 
that a floodway is proximate to the site, the risk it poses, and how to 
relocate during a flooding event.
    HUD Response: In the language of the new Sec.  55.4, HUD states 
that the notification requirements extend to the FFRMS floodplain. HUD 
contends that if a property were reduced in value due to flood risk, 
that risk would exist outside of any notification requirement HUD 
imposes.
    HUD intends to release additional guidance and technical assistance 
to assist grantees to better understand and utilize the conveyance 
restrictions outlined in Sec.  55.4. HUD intends to provide technical 
assistance and guidance for compliance with the hazard notification 
requirements which may include some form templates that grantees can 
use and what information regarding proximity to the floodplain should 
be included. Use of these forms will not be mandated in keeping with 
other public notice documents HUD provides for part 55. HUD contends 
that any administrative effort necessary to inform renters of their 
flood risk is not only minimal but necessary for the health and safety 
of residents. Given the existing requirements necessary in a rental 
agreement, HUD believes the additional costs of this notification to be 
de minimis.
    HUD intends to provide guidance and technical assistance to 
grantees, applicants, and responsible entities to help ensure 
consistent and compliant notice is provided to tenants when their 
buildings are in the floodplain of concern.
Consolidation and Clarification of Flood Insurance Requirements Under 
New 24 CFR 55.5
A. Support for Flood Insurance Requirements
    Several commenters expressed their support for the new flood 
insurance provisions in the proposed rule. One commenter suggested the 
changes will increase transparency and communication of flood risk and 
the benefits of flood insurance.
    Another commenter supported HUD requiring flood insurance beyond 
the minimum requirements established in the FDPA and said it was 
prudent and necessarily minimized financial risk. This commenter said 
that the existing FDPA is insufficient due to inadequate policy limits 
in an era of rapidly rising home valuations, the fact that the need for 
flood insurance in flood-prone areas that may be located just 
``outside'' of a designated Special Flood Hazard Area (``SFHA''), and 
the fact that FEMA has only mapped 1/3 of the Nation's floodplains.
    Another commenter said that the flood insurance provisions in the 
proposed rule are an important step to ensuring the sustainability of 
America's housing stock. Incorporating concepts such as CISA, 
additional freeboard protection, open space foundation systems and the 
limitation of the use of fill within SFHAs are higher standards proven 
to reduce risk.
    Another commenter agreed that HUD must ``prudently'' manage its 
FHA-insured mortgages by first understanding the portfolio's actual 
exposure to flood risk and the extent to which FHA homeowners must 
purchase flood insurance policies. The commenter said flood risk 
management policies at all levels of government are critical to 
reducing national flood losses.
    Another commenter said that all consumers should be encouraged to 
obtain flood insurance, especially given the increasing flood risk due 
to climate change.
    One commenter suggested that HUD expand the requirement for flood 
insurance for all assisted properties that have previously flooded, 
especially CDBG-DR projects.
    HUD Response: HUD appreciates the commenters' feedback regarding 
their support for the flood insurance provision and the increase in 
transparency and communication for flood risk. While the Department 
also appreciates the sentiment behind wanting to expand the flood 
insurance requirements outside of the special flood hazard area, HUD 
intends to strongly encourage flood insurance outside of those areas 
rather than mandate it. HUD does not have the authority to change or 
alter the NFIP regulations as those regulations are implemented by 
FEMA.
    HUD appreciates the commenters' sentiment regarding the need to 
improve flood risk management policies at all levels of government. The 
Federal government can help set a national regulatory floor for things 
like elevation and insurance standards, but local and State governments 
are encouraged to evaluate their own regions and develop code 
requirements that suit their needs if they go beyond the minimum set at 
the Federal level. This rule, which applies to the CDBG-DR program, 
explicitly encourages flood insurance for all properties within the 
FFRMS floodplain and beyond the 1-percent-annual-chance floodplain 
mapped by FEMA. Additionally, the rule clarifies that HUD, or the 
responsible entity, may require flood insurance coverage beyond the 
minimums to minimize financial risk.
B. Flexibilities and Exemptions to Requirements Sought
    One commenter urged HUD to allow flexibility for Public Housing 
Authorities to use different methods of transferring or retaining risk 
in proposed Sec.  55.5(b). This commenter said that requiring flood 
insurance up to replacement value for such entities may impact the 
market for flood insurance nationwide.
    Another commenter asked that any floodplain requirements be limited 
only to ``Federally funded projects.'' This commenter said that since 
HUD does not originate loans or fund projects through the FHA 
Multifamily Program, but rather, it insures those loans through the 
FHA, projects insured by these programs should not be required to meet 
the mandates of the FFRMS.
    HUD Response: HUD appreciates commenter concerns regarding the 
market for flood insurance nationwide. HUD has a responsibility to 
ensure that publicly funded investments in public housing authorities 
in higher risk areas like floodplains are protected against loss 
through insurance. Through Executive Order 11988, HUD is directed to 
protect Federal investments including those providing insurance of 
mortgages. Additionally, insurance markets are not generally limited by 
supply and more policy holders tend to drive down actuarial risk-based 
rates. HUD and FEMA both offer homeowners several resources to help 
them differentiate between types and obtain appropriate levels of flood 
insurance for their structures.
    For FHA multifamily mortgage insurance, the project is submitted to 
HUD as an application for approval prior to construction or 
rehabilitation. Therefore, the project is subject to NEPA and part 55. 
In contrast, newly constructed single family homes have already been 
constructed when an application for mortgage insurance is submitted to 
HUD. Therefore, newly constructed FHA insured single family properties 
are only subject to the Minimum Property Standards--NEPA and part 55 do 
not apply.

[[Page 30884]]

C. Opposition to Flood Insurance Requirements
    Several commenters opposed the proposed rule's changes to flood 
insurance requirements and language in the proposed rule stating that 
HUD ``strongly encourages'' flood insurance for all structures within 
the FFRMS floodplain. These commenters argued that maintaining flood 
insurance for all structures within the FFRMS floodplain will make it 
prohibitively expensive to build and operate necessary housing, and the 
costs will be passed along to residents in the form of higher rents and 
higher housing costs. Several of these commenters went on to say that 
though purchasing flood insurance beyond what is required may mitigate 
future financial losses, it may require some consumers to suffer 
current financial losses in the form of higher operating expenses. One 
commenter emphasized that they agree that flood insurance is an 
essential tool to manage potential future costs but that it can also 
make homes in risky areas less affordable.
    HUD Response: HUD believes that flood insurance is an important 
component of flood resilience. While HUD does not require flood 
insurance when a structure is located outside the 1-percent-annual-
chance floodplain, the Department supports and strongly encourages 
owners to obtain it as HUD knows that structures within the FFRMS 
floodplain are still at greater risk of flooding than those outside the 
floodplain. The Department recognized and acknowledged in the RIA that 
the rule has the potential to increase construction costs for housing. 
After weighing the increased cost against the potential savings 
associated with the benefit of more resilient housing stock, HUD 
determined it to be cost effective to move forward with the rule, 
including flood insurance requirements. HUD notes that the flood 
insurance requirements referenced in this rule are mandated by statute 
under the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(a)); 
the regulatory language in Sec.  55.5(a) applicable to financial 
assistance within the special flood hazard area restates the flood 
insurance requirements that are already required by statute outside of 
this rule. HUD does recognize though that while flood insurance can be 
a financial burden it is only required within the 1-percent-annual-
chance floodplain. The rule does not require flood insurance for all 
structures within the FFRMS floodplain but instead strongly recommends 
it.
D. FEMA Floodplain
    Several commenters urged HUD not to expand its requirements beyond 
FEMA mapping, asking HUD to limit flood insurance requirements to only 
structures located in the SFHA per FEMA maps. These commenters said 
that utilizing CISA maps would create a disjointed approach to flood 
insurance.
    Another commenter urged HUD to work with and support FEMA in its 
recommendations to reform the NFIP.
    One commenter suggested HUD rephrase the statement ``. . . the NFIP 
plays an important role in minimization measures to reduce flood 
losses,'' reasoning that flood insurance does not minimize losses but 
enables the insured to recoup some of the material losses.
    HUD Response: HUD appreciates the feedback from commenters 
concerned with flood insurance outside of the SFHA and FEMA-mapped 1-
percent-annual-chance floodplain. As stated in response to opposition 
to requirements, the rule does not extend flood insurance requirements 
to the FFRMS floodplain outside of the FEMA mapped 1-percent-annual-
chance floodplain. The rule only strongly recommends flood insurance in 
those areas. This is in keeping with FEMA's requirements under NFIP 
regulations. HUD will continue to work with its Federal partners and 
support their efforts to increase the Nation's resilience to disaster 
through various programs, including NFIP.
    HUD appreciates the comment but believes that the recoupment of 
flood damages may be considered a reduction of flood losses.
E. Limitations for Multifamily Housing
    One commenter supported increasing coverage limits but asked that 
HUD recognize the limitations on coverage in more expensive areas, 
particularly for multifamily buildings. This commenter explained that 
while some large residential buildings may be able to purchase private 
excess coverage, options in most areas are limited and often cost-
prohibitive for affordable housing providers. This commenter also said 
that NFIP coverage limits are insufficient to cover the costs of flood 
damage in multifamily homes, as well as in mixed-use buildings, and 
urged HUD to support efforts to increase coverage for such buildings. 
This commenter added that private insurers can refuse coverage to at-
risk buildings.
    Another commenter emphasized that the insurance industry is 
increasingly refusing coverage in high-risk areas.
    Other commenters said there are unique challenges for flood 
insurance for multifamily housing. Commenters said stories of 
multifamily buildings are usually elevated ten or more feet and if the 
first floor of a multifamily building is already elevated 2-4 feet 
above the Base Flood Elevation per the FEMA flood elevation, providing 
increased flood coverage for units located some 22-24 feet+ above the 
Base Flood Elevation would create unnecessary financial burdens to 
developers of multifamily projects in cases where no practical 
alternative to locating a project in the floodplain may be identified.
    HUD Response: While HUD appreciates the commenters' feedback 
regarding insurance coverage limits, HUD does not have the authority to 
change or alter the NFIP regulations as those regulations are 
implemented by FEMA. Generally, HUD supports the insurance of 
multifamily buildings in flood risk areas to the maximum extent 
possible, noting that they do often face significant challenges 
protecting the full value of the structure under NFIP. Where there is 
no practicable alternative to locating a HUD-assisted activity in 
proximity to flood sources, HUD will continue to require elevation or 
floodproofing where allowable to ensure these buildings and their 
tenants are protected.
F. Requests for Clarity on Flood Insurance Requirements
    One commenter expressed confusion over the language ``strongly 
encourages'' and asked HUD to consider replacing this language and to 
make clear what its expectations would be for flood insurance for those 
properties outside the FFRMS floodplain.
    Several commenters sought clarity on how HUD would determine if 
flood coverage equivalent to the full replacement cost of the structure 
would be required. These commenters recommended that the final rule 
make it clear for developers to know exactly what will be required for 
flood insurance when making decisions to acquire or develop land for 
housing use and not to leave it up to the individual developer's 
discretion.
    Other commenters wondered how HUD would enforce the acquisition and 
maintenance of flood insurance if it is not required by regulation. Who 
at HUD will have that authority and what training will they receive in 
order to make them qualified to make this determination?
    HUD Response: As discussed in response to opposition to flood 
insurance requirements above, flood insurance is only required within 
the 1-percent-annual-chance floodplain. To be clear, encouragement to 
obtain flood insurance outside the 1-percent-annual-

[[Page 30885]]

chance floodplain is not a requirement although grantees are allowed to 
expand requirements beyond the HUD minimums. HUD does not believe the 
binary status of obtaining or not obtaining flood insurance requires 
any particular specialized expertise to determine. Acquisition and 
maintenance of required flood insurance will be reviewed on a project-
specific basis as part of program monitoring requirements, as 
applicable.
    HUD will continue to utilize the direction of the MAP guide to 
determine the flood insurance coverage requirements for Multifamily FHA 
projects and the Section 232 Handbook for Healthcare FHA projects.
Exceptions
A. Incidental Floodplain Exceptions
1. Support for Limited Exceptions
    Several commenters expressed support for the exceptions at Sec.  
55.8(a)(2) for floodplain restoration activities, explaining that the 
proposed language is more flexible than the current standards, while 
incurring de minimis impacts to the floodway.
    One commenter expressed their support for proposed language to 
clarify and ensure that floodways assistance would only be allowed for 
limited floodplain restoration activities and only after engaging in 
the 8-step decision making process and justifying that there are no 
practicable alternatives. This commenter explained, citing FEMA 
guidance, that floodways naturally convey floodwaters downstream and 
thus designing a floodway and regulating development within that 
floodway is necessary because any obstruction increases likelihood and 
elevation of flooding both upstream and downstream.
    Several commenters supported allowing safe installation of utility 
lines to cross floodways where it is the most practicable method for 
connecting existing lines, reasoning that this is practical because 
utility mains are often in low-elevation areas and likely to be safe 
because development codes often require tie ins in these areas and 
utility line instillation causes only temporary impacts.
    One commenter supported allowing removal of man-made structures 
from the floodway/floodplain. This commenter recommended that HUD amend 
the rule to make clear that projects restoring wetlands, floodplains, 
rivers, or other aquatic habitats in alignment with FFRMS objectives 
are exempt from the 8-step decision making process.
    One commenter supported equivalent protections in the LiMWA as the 
V Zones. Another commenter endorsed the improved protections in Coastal 
A zones or areas within the LiMWA.
    HUD Response: HUD appreciates the support from commenters regarding 
the exceptions at Sec.  55.8(a)(2). That said, based on feedback 
received, HUD has made language changes in this section to more clearly 
delineate the purpose of the section in relation to Sec. Sec.  55.12(g) 
and 55.21. Specifically, in Sec.  55.12(g), HUD has removed the 
requirement for a permanent covenant such that the exemption more 
logically follows the review process for projects with an incidental 
floodplain. In Sec.  55.21, HUD has clarified that to be eligible for 
the alternate processing for existing projects, the project must meet 
certain minimum eligibility criteria. These minimum criteria include 
the following: removing all residential units from the floodway, 
elevating or floodproofing all buildings in the FFRMS floodplain, 
including existing structures where practicable, and receiving a No 
Rise Certification for any new improvements in the floodway. HUD 
intends to produce additional guidance and technical assistance 
material which will outline the types of activities allowed on 
properties containing a floodway but not within the floodway itself. 
HUD notes that under CPD-17-013, it has outlined a methodology that 
allows certain linear infrastructure to cross a floodway where it is 
appropriately mitigated and there are no practicable alternatives. HUD 
also notes that under Sec.  55.12(c), the restoration of wetlands and 
floodplains is exempt from the 8-step decision making process.
    HUD appreciates the support for the equivalent protections across 
the V zones and the LiMWA. HUD's intent with this revision is to 
increase the resilience of coastal construction.
2. Exceptions Are Not Protective Enough
    Several commenters expressed concerns that proposed exceptions 
provide insufficient floodway protection. Several commenters urged HUD 
to prohibit all development and reconstruction within floodways, the 
deepest and highest velocity portion of drainage, to avoid certain 
continued losses to HUD projects and safety risks to residents.
    One commenter urged HUD to prohibit both critical and noncritical 
building actions in floodways and coastal high hazard areas, instead of 
allowing noncritical actions under the circumstances listed in the 
proposed rule. This commenter reasoned that the focus must not only be 
on ceasing development in floodways, but also on restoring and re-
establishing natural infrastructure. This commenter supports the 
proposed rule permitting noncritical actions within the remaining two 
categories--wetlands/1-percent-annual-chance floodplain outside 
floodways and non-wetlands area outside of the 1-percent-annual-chance 
and within the 0.2-percent-annual-chance floodplain--but only on a 
case-by-case basis and requiring the 8-step decision making process.
    This commenter supported the proposed amendment prohibiting placing 
``community stormwater management infrastructure and water treatment 
plants'' in floodways due to high risk of becoming inoperative in a 
flooding event. However, this commenter urged HUD to go further by 
amending Sec.  55.1(c)(2) to read: ``any critical action located in a 
coastal high hazard area or within the existing 100-year or 500-year 
floodplain maps, to be amended.'' This commenter also asked HUD to add 
``schools'' to the definition of ``critical action'' reasoning that 
damage to schools causes significant disruption to students and 
communities.
    Several commenters asserted that new construction in floodplains, 
even under the 8-step decision making process, will have the following 
negative impacts: (1) waste scarce financial resources on resilience 
and mitigation activities; (2) subject households, predominantly low-
income families, to damage and danger; and (3) continue legacies of 
exclusionary zoning practices.
    One commenter urged HUD to remove floodplain exceptions for 
residential structural infrastructure (utility lines, pipelines) from 
the proposed rule. This commenter explained that flooding results in 
catastrophic impacts to nearby residential drinking water when water, 
sewer, and wastewater utilities are in flood-prone areas, citing joint 
EPA and FEMA guidance that these utilities face unique risks in flood-
prone areas and that it is cost intensive to build them to resilient 
standards.
    Several commenters asked HUD to provide a clear definition of the 
incidental floodplain for public comment. One commenter asked HUD to 
clarify whether part 55 requirements would be triggered if an 
undeveloped portion of a property is within the floodplain, while the 
structure itself is not.
    One commenter posed the following questions: (1) How did HUD 
determine that paving floodway areas for basketball and tennis courts 
is de minimis? (2) Is there a critical number

[[Page 30886]]

of projects that cannot avoid paving floodway areas such that this 
exception is necessary?
    Several commenters requested explicit guidance on the methods of 
utility installation that are permitted/prohibited.
    Several commenters stated that HUD should defer to NFIP/local 
regulations for floodway actions.
    HUD Response: HUD appreciates the feedback from commenters 
regarding concerns over exceptions HUD uses to allow work on properties 
with a floodway on site. HUD disagrees that all work needs to be 
prohibited from floodways, noting that many functionally dependent uses 
must be built in these areas in order to work properly. HUD does not 
exempt this work from the 8-step decision making process; however, work 
in these sensitive areas is often the most critical to review for 
impacts, alternatives, mitigations, and engagement with the public. 
Under the rule, HUD will prohibit any new residential construction in 
the floodway with the goal of ensuring the potential to harm human life 
is minimized. Because of feedback received, HUD has revised the 
language of Sec.  55.21 to make it clear that residential units must be 
removed from the floodway, all buildings in the FFRMS floodplain must 
be elevated or floodproofed where practicable, and a No Rise 
Certification must be obtained for any new improvements in the 
floodway, in order for the exception to apply. HUD intends for the 
alternative processing for existing nonconforming sites outlined in 
Sec.  55.21 to be used in very rare circumstances and only under the 
strict review and sole discretion of HUD's Office of Environment and 
Energy and the Assistant Secretary for Community Planning and 
Development, where HUD determines the proposed action is protective of 
human health and the environment. Depending on the nature of the 
proposed activities in or near a floodway, the alternative processing 
may require substantial mitigation measures and appropriate 
documentation to obtain, if approved.
    HUD disagrees that funding spent on any mitigation determined 
necessary through an 8-step decision making process would be considered 
a ``waste of resources.'' Mitigation that reduces risk and protects 
life and property can only be seen as a benefit for populations that 
would otherwise be at increased risk of flooding. Additionally, HUD 
contends that supporting the resilience of structures in the floodplain 
better protects those structures against future loss and disagrees that 
increasing community resilience continues the legacy of exclusionary 
zoning.
    HUD notes the commenters' feedback regarding wastewater treatment 
and stormwater facilities; however, these facilities, while critical 
actions, are also functionally dependent on being near water. HUD did 
not intend to disallow functionally dependent facilities from receiving 
funding with this rule and as such has allowed an exception for 
functionally dependent projects which meet the mitigation requirements 
at Sec.  55.8(a)(2) and complete an 8-step decision making process in 
accordance with 24 CFR 55.20. This change brings HUD in line with its 
Federal partners like FEMA in allowing the funding of certain types of 
functionally dependent facilities.
    HUD disagrees that all schools need to be included as critical 
actions because schools do not have permanent residents and will not be 
occupied during an emergency.
    Examples of de minimis improvements listed in Sec.  
55.8(a)(1)(ii)(B) include activities that have minimal ground 
disturbance or placement of impervious surface area to ensure 
accessibility where permitted by local ordinances and where it does not 
increase flood risk to the property. HUD intends to provide grantees, 
applicants, and responsible entities with technical assistance and 
guidance to ensure any improvements in a floodway are de minimis and 
that only compliant work is allowable under this part.
    Any action allowed by HUD would also need to be compliant with NFIP 
and local regulations.
    HUD intends to release technical assistance and guidance to help 
grantees, applicants, and responsible entities better determine when it 
is appropriate to utilize the incidental floodplain exception at Sec.  
55.12(g). HUD notes that projects with an undeveloped portion of the 
property located within the floodplain will be exempted from part 55 
analysis if all requirements under Sec.  55.12(g) are met.
B. Inapplicability of 24 CFR Part 55 to Certain Categories of Proposed 
Actions Under Sec.  55.12
1. Expanded Exception for Floodplain and Wetland Restoration and 
Preservation Activities
    Several commenters expressed support for the expanded flexibility 
for parks and recreation uses in combination with restoration and 
preservation activities. Several commenters explained that the proposed 
exception will increase the quality of life for HUD-assisted tenants by 
providing opportunities to connect with nature and the floodplain and 
wetland habitat where they live, without significant disruption to 
those areas' function.
    One commenter urged HUD to amend the rule to add incentives or 
favor parks and greenspace projects that incorporate green 
infrastructure to restore/protect natural ecosystems like wetlands, 
prairie, riparian corridors, and bayous. This commenter explained that 
preserving remaining riparian and wetland infrastructure is proven to 
slow flood waters avoiding future flooding damages, while also 
providing communities with necessary parks and green space for 
communities. This commenter cited a study showing that affluent bayou 
communities received greater government investment in flood protection 
following Hurricane Harvey than low-income communities as reasoning for 
going beyond the proposed mandated process towards an incentive model.
    Another commenter asked if HUD could expand the flexibility for 
restoration activities compatible with beneficial floodplain and 
wetland function beyond parks and recreation activities.
    Several commenters asked HUD to explain what kinds of ``structures 
and improvements designed to be compatible with the beneficial 
floodplain or wetland function'' would be allowed and asked for this 
clarification to be included for public comment.
    HUD Response: HUD appreciates the support from commenters regarding 
the expanded flexibility for parks and recreational space within the 
floodplain. It is HUD's hope that these spaces are maintained as a 
benefit to HUD-assisted tenants as an improvement to their quality of 
life without adversely impacting the floodplain.
    HUD believes that by allowing greenspace restoration within the 
floodway, HUD can better incentivize restoration and protection of 
riparian buffer spaces and wetlands which provide compounding 
resilience benefits across the floodplain.
    HUD does not currently have plans to expand the flexibility for 
restoration activities beyond what the rule allows because there is no 
funding for HUD to provide additional incentives. HUD intends to 
provide additional guidance and technical assistance to help grantees, 
applicants, and responsible entities discern which improvements and 
structures are allowed and compatible with beneficial floodplain or 
wetland function.

[[Page 30887]]

2. Removal of LOMA/LOMR Exceptions
    Several commenters expressed support for removing both part 55 
exceptions for sites that have received LOMAs/LOMRs. Several commenters 
specifically supported the removal of the conditional LOMA/LOMR 
exception, explaining that provisions to disincentivize the use of fill 
will protect natural and beneficial floodplain and wetland functions. 
Several commenters further reasoned that adding fill to floodplains 
causes increased flood risk to surrounding properties/areas and 
expansion of the floodplain. One commenter stated that disincentivizing 
the use of fill will protect neighboring residents, property, and the 
environment. Another commenter expressed support for limiting fill 
within special flood hazard areas. Conversely, several other commenters 
opposed removing the LOMA/LOMR exceptions. Several argued that doing so 
would result in an unnecessary administrative burden on borrowers and 
lenders; and that additional government agencies--HUD and the USACE--
would add unnecessary bureaucratic processes. Several commenters asked 
HUD to define which governmental agency would have final authority to 
determine if a floodplain change is required. One commenter added that 
the additional layer of bureaucracy created by requiring projects that 
are outside the 1-percent-annual-chance floodplain under FEMA's 
requirements to complete the 8-step decision making process will create 
confusion and regulatory conflicts and delay much needed housing. This 
commenter urged HUD to defer to FEMA's expertise on whether a property 
is outside of a floodplain.
    Several commenters asked HUD to clarify whether the requirement to 
elevate sites with no known or previously occurring flood risk to the 
respective required standards under each approach will result in 
requiring completion of the 8-step decision making process before 
adding fill, per Sec.  55.12(c)(8). These commenters added that if this 
would trigger the 8-step decision making process, it would cause 
administrative burden on borrowers and lenders.
    Several commenters specifically urged HUD to retain the conditional 
LOMA/LOMR exception. Several commenters stated that the current 
conditional LOMR/LOMA system is more effective for determining when 
fill may be added to remove sites from the 1 percent annual chance 
floodplain because FEMA, civil engineers, and local authorities 
understand the impact to adjoining sites and provide sufficient 
governmental oversight. These commenters stated that HUD's reasoning 
for removing the exception on conditional LOMAs/LOMRs to avoid 
incentivizing adding fill is contradictory or is a moot point, 
considering that other portions of the proposed rule require the use of 
fill without limits due to the impact on adjoining areas.
    Several commenters disagreed that excepting conditional LOMA/LOMR 
projects from the 8-step decision making process incentivizes filing 
floodplain areas, stating that the exception allows developers to 
incorporate plans to minimize floodplain impacts in the early stages of 
planning, prior to civil plans required as part of the 8-step decision 
making process.
    HUD Response: HUD appreciates the commenters' support for the 
removal of exemptions based on LOMAs/LOMRs. As LOMAs/LOMRs act to 
remove an area or structure from the base floodplain and not the FFRMS 
floodplain, HUD did not think they would provide the necessary 
information to remain as an exemption to part 55. Additionally, HUD did 
not want to incentivize the use of fill in the FFRMS floodplain.
    HUD disagrees with commenters' feedback that removing the LOMA/LOMR 
exemption creates an unnecessary administrative burden on borrowers and 
lenders because LOMAs/LOMRs do not remove sites from the FFRMS 
floodplain. Regardless of whether or not exempting conditional LOMA/
LOMR projects from the 8-step decision making process incentivizes the 
use of fill, misaligned Federal processes and policies inherently 
create a greater burden on practitioners attempting to comply with 
conflicting rules, so the exemption must be removed to reduce these 
burdens. As the FFRMS floodplain is defined by the processes laid out 
in the rule, HUD or the responsible entity has final authority to 
determine if a site is located in the FFRMS floodplain, based on the 
appropriate FFRMS definition for the locality. HUD agrees that the rule 
will expand HUD's regulatory footprint beyond the FEMA-mapped 1-
percent-annual-chance floodplain. However, under E.O. 13690 HUD is 
directed to review a broader area and account for an increasing flood 
risk over time through the use of the FFRMS floodplain. While LOMAs/
LOMRs can be effective tools at determining when sites have been 
removed from the FEMA mapped 1-percent-annual-chance floodplain, they 
have no bearing on the state of a site with regards to the FFRMS 
floodplain.
    Additionally, HUD notes that other Federal agencies like FEMA are 
working on updating their own floodplain management regulations to 
account for E.O. 13690 and increasing flood risks to Federal 
investments.
    HUD notes that Sec.  55.12(c)(8) is being removed but if a project 
were to add fill to a site located in the FFRMS floodplain, it would 
likely trigger the 8-step decision making process under the rule. That 
said, the rule does not require that elevation be completed with fill 
and in fact, discourages its use for compliance.
    HUD disagrees with commenters' feedback that removing the existing 
LOMA/LOMR exemption will affect the ability of developers to 
incorporate mitigation in the early stages of planning. Because the 
NEPA process mandates that environmental review be complete prior to 
any choice limiting actions being taken, any mitigations for a project 
site must be considered prior to construction regardless of the status 
of a FEMA FIRM change.
C. Exceptions in Proposed Sec. Sec.  55.13 and 55.14
    Several commenters expressed support for the proposed exception for 
special renewable energy projects, stating that the exception is 
forward-thinking and will likely result in increased use of energy-
efficient technology in HUD projects.
    One commenter urged HUD to revise the rule to provide the following 
limits on this exception: (1) do not permit a streamlined 8-step 
decision making process for energy efficiency projects that replace 
systems or appliances with fossil fuel-fired system or appliance under 
24 CFR 50.13 and 50.14; and (2) add language to 24 CFR 55.13(f) 
requiring that proposals to install fossil fuel infrastructure to 
improve energy efficiency have no feasible electric alternative.
    One commenter asked HUD to clarify the threshold for ``limited 
potential to adversely affect floodplains or wetlands'' for energy 
efficiency projects seeking the Sec.  55.13(f) exception.
    HUD Response: HUD appreciates the commenters' feedback regarding 
exceptions for renewable energy projects. HUD disagrees that it is 
necessary to limit this exception to apply only to energy efficiency 
projects that do not use fossil fuels. HUD wishes for this exception to 
benefit any project that improves energy or water efficiency or 
installs renewable energy that does not meet the threshold for 
substantial improvement and does not wish to limit fossil fuel projects 
to only those where there is no electric alternative.
    HUD intends to provide guidance and technical assistance to 
grantees,

[[Page 30888]]

applicants, and responsible entities acting as HUD to ensure they can 
properly assess projects seeking the exemption at Sec.  55.13(f) and 
understand which projects have the potential to affect floodplains and 
wetlands.
D. Revisions to Categorical Exclusion From Further Environmental Review 
Under NEPA Under Sec.  50.20(a)(2)(i)
1. Support for Proposed Revisions to Categorical Exclusion
    One commenter expressed support for proposed revisions that allow 
timelier remediation of existing floodplain properties if HUD ensures 
that any impact resulting from an increased footprint would be fully 
addressed in the 8-step decision making process. This commenter 
provided maps of existing affordable housing units overlaid with FEMA 
flood maps showing many single family homes in flood zones that have 
already lost money and explained that allowing remediation for these 
homeowners will allow more low-income homeowners to decide for 
themselves whether to rehabilitate their homes. This commenter further 
explained that they would not support this amendment but for the ``hard 
look'' required by the 8-step decision making process that this 
commenter hopes will discourage floodplain development.
    Another commenter stated that if the 8-step decision making process 
is part of a full environmental review, the information sought is 
addressed under NEPA and HUD should avoid repetition.
    HUD Response: HUD appreciates the commenters' feedback regarding 
HUD's plans to align its part 50 regulations with its part 58 
regulations.
    HUD notes that compliance with part 55, including completion of the 
8-step decision making process when required, is included as part of 
HUD's NEPA compliance regulations under parts 50 and 58.
2. Opposition to Proposed Revisions to Categorical Exclusion
    One commenter opposed removing the qualification to categorical 
exclusion where a rehabilitation project would increase the footprint 
of a structure within a floodplain or wetland under Sec.  
50.20(a)(2)(i). This commenter reasoned that foregoing full NEPA 
analysis of projects receiving HUD funds that would adversely impact 
critical habitat and flood mitigation services is counterproductive. 
This commenter also asked HUD to expand wetland identification 
protocols beyond the National Wetlands Inventory where necessary.
    This commenter also suggested the following revisions to the 
categorical exclusion list at Sec.  50.19: (1) require environmental 
review when HUD supports new construction projects with fossil fuel 
utility service or homebuying assistance for homes that are not all-
electric, and (2) qualify equipment purchase and operating costs under 
Sec.  50.19(b)(13) and (14) to exclude costs associated with newly 
installed fossil fuel-fired systems and appliances. This commenter 
explained that fossil fuel extraction and combustion contribute to 
climate change, increasing the likelihood and severity of flooding and 
that further government subsidy of climate change inducing housing is 
an irresponsible use of taxpayer funds. Further, this commenter 
suggested that HUD could reallocate savings to increase sustainable 
affordable housing.
    HUD Response: HUD disagrees with the commenter's feedback that 
aligning its part 50 categorical exclusion with its part 58 exclusion 
will allow adverse impacts to critical habitat and flood mitigation. 
HUD has utilized this approach for part 58 reviews since 2013 and has 
not seen the described adverse impacts. Projects that meet this 
categorical exclusion remain subject to the requirements under part 55 
as well as other laws and authorities at 24 CFR 58.5 and 50.4. The 
potential adverse impacts of a project do not change based on the 
determination of which entity is responsible under NEPA. Furthermore, 
HUD notes that before applying a categorical exclusion to a proposed 
action, HUD or the responsible entity assesses the proposed action for 
extraordinary circumstances that would require preparation of an 
environmental assessment or environmental impact statement. 
Additionally, HUD addresses potential climate change impacts for 
projects that require an Environmental Assessment or environmental 
impact statement through the climate change environmental assessment 
factor. Additional edits to the categorical exclusions at parts 50 and 
58 are outside the scope of this rulemaking.
E. U.S. Army Corps of Engineers Permit Exception
    Several commenters opposed the proposed removal of Sec.  55.28 when 
a permit has been obtained from the USACE for a proposed HUD-assisted 
construction activity in a jurisdictional wetland outside of the 
floodplain. These commenters questioned whether the USACE consistently 
implements the 8-step decision making process per FEMA guidance in 
implementing E.O. 11988 and urged HUD to revise the rule to require 
that prior to granting relief, HUD confirm that other agencies have 
adequately completed the 8-step decision making process.
    HUD Response: HUD appreciates the commenters' feedback regarding 
the removal of Sec.  55.28. However, HUD contends that this section was 
unnecessary because this exemption was rarely utilized by grantees and, 
under the new Sec.  55.26, HUD maintains a method for adopting another 
agency's 8-step decision making process when appropriate. Through Sec.  
55.26, HUD intends to reduce unnecessary duplication of Federal 
regulatory processes to support the development of compliant and 
resilient projects.
Wetlands
A. Approach to Identifying Wetlands in Sec.  55.9
1. Support for Changes to Sec.  55.9
    Several commenters supported HUD's changes to Sec.  55.9, 
broadening its approach for identifying wetlands. Several other 
commenters acknowledged their support and cited the important 
biodiversity wetlands provide, along with the ways that wetlands 
naturally regulate the climate. One commenter supported HUD for looking 
beyond a ``desktop review'' of landscapes to determine wetlands.
    Several commenters specifically supported HUD's proposal to broaden 
the screening of wetlands beyond the use of USFWS' NWI. One commenter 
quoted from the USFWS' explanation that the NWI methodology does not 
effectively identify all types of wetlands and a ``margin of error is 
inherent.'' Noting this plus the United States Supreme Court's rollback 
of wetlands protections under the Clean Water Act, the commenter 
supported backup protocol for identifying wetlands and urged HUD to use 
the full extent of its legal authority to protect these critical 
habitats and the important flood mitigation functions they provide.
    HUD Response: HUD appreciates the commenters' support for Sec.  
55.9 of the proposed rule; however, HUD notes that the rule does not 
change HUD's definition of a wetland, it clarifies it as being more 
than what is identified on an NWI map.
2. Recommendations To Increase Wetland Identification Requirements
    One commenter stated that the NWI data varies in accuracy and that 
in order to ensure the accuracy of wetlands determinations, such a 
determination should be confirmed by an on-site analysis that includes 
an assessment of the functions of the ecosystem. This commenter went on 
to say that the analysis should be confirmed with the

[[Page 30889]]

USFWS, along with further consultation with the USACE, U.S. 
Environmental Protection Agency (EPA), and/or State or Tribal aquatic 
resource regulators. This commenter agreed with HUD's proposal to 
assess ``biological'' rather than regulatory wetlands and urged HUD to 
develop a functional analysis methodology in consultation with the 
Academy of Science and Tribal and State programs for aquatic resources 
proposed to be impacted by HUD actions.
    One commenter stated that resource identification needs to be done 
in combination with other geospatial tools, such as Light Detection and 
Ranging (LiDAR) technology. The commenter stated that NWI should not be 
a primary presence/absence indicator of wetlands, but rather used as 
part of a suite of remote tools and ``on the ground'' analysis 
including a functional analysis method to determine the role the 
resource is playing in flood resiliency and abatement. This commenter 
recommended additional consultation with the USACE, the EPA, and/or 
State or Tribal aquatic resource regulators.
    Other commenters added that the NWI indicates the general presence 
of wetlands on a site but fails to accurately capture the full 
delineation of wetlands at ground-scale, especially for the 
identification of smaller wetlands of an acre or less. These commenters 
also supported the proposed requirement for a ``visual assessment'' of 
a site to help identify wetlands. The commenters suggested that HUD 
revise the requirement to require evaluation of all undeveloped sites 
using one of the three proposed methods to ensure that wetlands 
identification on an undeveloped tract is not left to the visual 
assessment of an untrained practitioner.
    One commenter urged HUD to clearly articulate that a physical 
review of a property by a qualified wetland scientist is necessary by 
adding the word ``physically'' to Sec.  55.9(b). If not, this commenter 
asked HUD to add language explaining in detail how the development 
community should meet the proposed rule's intent of slowing the 
destruction of wetlands within communities.
    Several commenters emphasized the importance of trained 
professionals conducting the visual assessment. Other commenters asked 
whether there are any qualification requirements for the personnel 
performing the visual screening and whether an environmental review 
consultant would be acceptable. One commenter asked who at HUD would be 
adequately trained to perform the visual observation and what this 
training will consist of.
    HUD Response: Existing HUD policy has historically encouraged the 
use of tools and delineations that go beyond the NWI mapper to 
determine if wetlands are present on a site. The rule's methodology for 
wetland identification streamlines that policy into a more actionable 
and functional process for practitioners and reviewers. It is important 
to HUD that this rule maintains strong protection for wetlands without 
increasing regulatory burden. HUD agrees that wetlands are critical 
habitat and play a vital role in flood mitigation for communities.
    HUD disagrees that either an on-site wetlands delineation or LiDAR 
assessment is necessary or appropriate for every wetland review. NWI 
maps and visual observations of a site provide sufficient information 
for responsible entities to preliminarily determine if further 
investigations are warranted. Requiring fully detailed delineations by 
certified wetland scientists for all projects on undeveloped land would 
constitute a significant financial and administrative burden that HUD 
does not wish to impose on its grantees at this time.
    It is HUD's intent to provide subregulatory guidance to help 
grantees navigate the wetland review process including desktop review, 
visual inspection, and when delineation performed by a certified 
wetland scientist would be considered necessary and appropriate. Any of 
these options may be appropriate and will depend on the associated 
needs of the project involved. Additionally, HUD may consult with other 
agencies like USACE, EPA, or USFWS as necessary to ensure potential 
impacts are appropriately mitigated and/or any necessary permits are 
obtained. During the 8-step decision making process, HUD also requires 
responsible entities to engage with the public and interested parties 
like local, Tribal, and non-profit groups with an interest in the 
resource.
    HUD has floodplain and wetlands subject matter experts who will 
work with grantees, applicants, and responsible entities to ensure 
compliant reviews are performed in accordance with E.O. 11990.
3. Concerns With Changes to Sec.  55.9
    Some commenters suggested if a wetland is suspected, sites should 
be evaluated by the NWI, State, and local wetland and stream maps, 
hydric soil maps, topographic maps, and historical imagery. These 
commenters said hydric soil maps should be included in the 
environmental review as part of wetlands protection, similarly to the 
United States Department of Agriculture (USDA) requirements. The 
commenters went on to say that if suspected wetlands are identified 
through these desktop methodologies, the property should be reviewed by 
a wetlands consultant and receive comment from the USACE.
    Another commenter wrote that the several approaches to identifying 
wetlands in this proposed rule will produce inconsistent and 
unpredictable results. The commenter said HUD's goal in updating its 
wetland regulations is ``to streamline them, improve overall clarity, 
and modernize standards.'' This commenter believes the most effective 
approach to realizing these goals is through the adoption of the 
universally recognized definition of wetlands developed by the USACE 
and EPA.
    Several commenters submitted a more specific concern that the 
meaning and intent of ``visual indication'' is not clear. The 
commenters urged HUD to clarify the ``visual indication,'' and said 
such vague terminology may lead to widespread inconsistency in the 
application of the wetland identification process.
    These commenters also asked whether the use of just one of the 
evaluations (USFWS consultation or NRCS Soil Survey with further 
evaluation performed by the environmental review preparer) would be 
sufficient to rule out the presence of wetlands, without the need to 
complete a wetland delineation.
    Several commenters recommended that HUD completely remove the first 
method from its final rule. The commenters argued that the job of the 
USFWS is not to consult on wetlands, rather sites should be evaluated 
by the NWI, State, and local wetland and stream maps, hydric soil maps, 
topographic maps, and historical imagery and the property should be 
reviewed by a wetlands consultant with comment from the USACE.
    One commenter pointed out that it is not clear in the proposed rule 
whether the three methods provided are in order of preference or if any 
one of them can be selected to rule out the presence of wetlands. 
Commenters also requested that HUD clarify whether once a site has 
screened inconclusive for potential wetlands, a developer may rely on 
citing just one of the three methods outlined to conclude there are no 
wetlands onsite.
    HUD Response: HUD agrees with commenters that when NWI maps are 
unavailable or responsible entities feel they may be inaccurate, HUD 
does allow grantees to use best available information to support their

[[Page 30890]]

conclusions. This can include local and State maps, soil maps, 
topographic maps, and historical imagery. This has historically been, 
and continues to be, HUD's approach to wetlands review under the rule. 
HUD disagrees that the rule's approach to wetland identification will 
create inconsistent and unpredictable results. The definition for 
wetlands as used by the USACE and the EPA stems from the Clean Water 
Act and covers a narrower definition of wetland which is tied into 
their respective permit authorities.
    It is HUD's intent to provide subregulatory guidance which will 
help grantees navigate the wetland review process including visual 
inspection and when delineation would be considered necessary and 
appropriate.
    As the Federal agency tasked with managing the NWI mapper, USFWS is 
the first agency consulted if a potential issue or deficiency with the 
NWI is identified.
B. Limitations of HUD Assistance in Wetlands in Sec.  55.10
    Several commenters argued that the rule should prohibit all new 
construction in wetlands. One commenter said that subjecting 
construction in wetlands to the 8-step decision making process is not 
enough and that the importance of wetlands in lessening the impact of 
both riverine and coastal flooding should spur HUD to take additional 
steps to prevent new construction within them. The commenter emphasized 
that wetlands and wetland vegetation provide low-maintenance storm 
mitigation by storing water and slowing the speed of flood waters, 
along with serving as storm surge protectors. This commenter also noted 
that coastal wetlands are often viewed as cultural resources by the 
surrounding communities who view the continued encroachment of 
development into these areas as a destruction of their heritage. One 
commenter urged HUD to use stronger language prioritizing the 
preservation of wetlands and firmly assert that wetland and riparian 
corridors should be avoided. The commenter opined that Federal dollars 
should not be used to develop properties that put people in harm's way.
    Several commenters emphasized the importance of nature-based 
solutions and existing green infrastructure known to slow flood waters 
and protect communities such as wetlands, prairies, riparian corridors 
and/or bayous as well as reconfiguration of the project footprint and 
incorporating resilient building standards. One commenter asked HUD to 
add specific provisions to the proposed rule protecting wetlands and 
incorporating green infrastructure and to conduct an economic analysis 
through case studies on various high-flood-prone communities to show 
that protecting the riparian corridors and wetland green infrastructure 
would be more cost beneficial than allowing development and covering 
properties with insurance.
    One commenter recommended that all Federal agencies calculate the 
effects of wetland loss through funding and permitting programs in 
accordance with E.O.s 11988 and 13690. The commenter noted that Step 5 
in FEMA's ``Guidelines for Implementing E.O. 11988 and E.O. 13690,'' 
published October 8, 2015, states that the concepts of ``Minimize, 
Restore, Preserve . . . apply if a proposed action will result in harm 
to or within the floodplain'' and defines ``harm'' to apply to both 
lives and property, and natural and beneficial floodplain functions. 
Therefore, the commenter went on to say, it would seem logical that any 
unavoidable impacts to natural infrastructure within a floodplain, 
including wetlands, should be mitigated for within the sub-watershed 
effected and provide ecosystem services to the same locality where the 
impacts occurred.
    Another commenter asked if the impact to one or more acres of non-
jurisdictional wetlands is proposed, how HUD will manage the mitigation 
requirement. This commenter urged HUD to define the one-acre mitigation 
policy. The commenter noted that compensatory mitigation for 
jurisdictional wetlands is well-established and widely understood but 
the prescription of compensatory mitigation for disturbance to more 
than one acre of non-jurisdictional wetlands is not clear in the 
proposed rule, and HUD should indicate that it is not required for non-
jurisdictional wetlands.
    Another commenter asked for clearer information about the costs and 
process of purchasing compensatory mitigation for non-jurisdictional 
wetlands.
    Another commenter stated that they do not agree that wetlands 
mitigation should be limited to impacts greater than one acre since any 
loss of wetlands and floodplains impacts communities and water quality 
by impairing the ability of watersheds to provide resiliency and flood 
storage capacity during storm events. This commenter also said that 
they do not agree with an approach whereby mitigation would be 
translocated to an in-lieu-fee or banking instrument which is not 
providing direct benefits to the impacted reach of the waterway and 
associated floodplain.
    HUD Response: HUD disagrees that new construction should be 
entirely barred from wetlands and that the 8-step decision making 
process is not enough. While HUD agrees that wetlands are important and 
play important roles as critical habitat and flood protection, an 
outright ban on construction would have significant adverse impacts on 
development nationwide. HUD will continue to fund new construction in 
wetlands where it has been demonstrated that no practicable alternative 
exists and that all necessary mitigation measures have been taken. HUD 
acknowledges that many communities identify coastal wetlands as 
cultural resources or important heritage sites and notes that 
consultation requirements on historic and culturally significant 
resources are covered under the National Historic Preservation Act 
(NHPA). No part of this rule exempts sites from review under the NHPA 
or any other applicable Federal laws and authorities.
    HUD agrees with commenters on the importance of nature-based 
solutions. HUD is seeking to strengthen the 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, identified in 
Sec.  55.20(e). These strategies include encouraging the use of natural 
systems, ecosystem processes, and nature-based approaches when 
developing alternatives for consideration where possible.
    HUD continues to work with FEMA and other Federal partners to 
minimize any adverse impacts to wetlands from HUD funded projects. In 
addition, in cases where multiple funding sources are anticipated, HUD 
recommends utilizing the Unified Federal Review (UFR) to assist in the 
collaborative cross-agency/Department discussions to resolve any 
differences across the agencies and ensure cohesion in funding and 
goals for the project. Additionally, it should be noted that HUD has 
procedures in place to adopt the environmental reviews of other Federal 
agencies to avoid unnecessary duplication of effort.
    HUD intends to provide grantees, applicants, and responsible 
entities training and technical assistance to assist them in utilizing 
appropriate mitigation measures when non-jurisdictional wetlands have 
unavoidable impacts. Historically, these mitigations have included 
various forms of compensatory mitigation, and the rule is not intended 
to change this provision. The use of any compensatory

[[Page 30891]]

mitigation is not viewed as a substitute for the requirement to 
minimize impacts to the maximum extent possible.
Changes to the 8-Step Decision Making Process
A. Roles and Responsibilities
    One commenter asked HUD to clarify who will conduct encroachment 
and other floodway analysis and how that analysis is to be done under 
the new Sec.  55.21. This commenter stated that FEMA's current guidance 
is for the community or developer to conduct it and explained that most 
local permit officials are not qualified and thus require the developer 
to pay for an engineer to conduct encroachment analysis.
    HUD Response: HUD has floodplain and wetlands subject matter 
experts who will review and make recommendations for exemptions 
requested under the Sec.  55.21 provision. HUD and responsible entities 
may rely on project engineers, Federal science agencies (e.g., FEMA, 
USACE), and other experts as needed, depending on the nature of the 
flood risk and the project proposed.
B. Consistency With FFRMS and New Sections
    One commenter expressed support for the proposed updates to the 8-
step decision making process to provide clarity and alignment with the 
FFRMS.
    One commenter recommended that wherever HUD defines FFRMS 
floodplain identification methods, it should consistently use terms 
referring to both elements of the definition--flood elevation and 
floodplain extent.
    Several commenters asked for clarification whether improvements 
within the 0.2-percent-annual-chance floodplain will trigger the 5- or 
8-step decision making process considering that CISA maps are not 
currently available and HUD does not predict national coverage for 
years. These commenters urged HUD to make FFRMS guidance clear and 
methodical to avoid leaving room for interpretation.
    Several commenters suggested that HUD define ``areas required for 
ingress and egress,'' a triggering ``action'' under Sec.  55.20(a), and 
that the definition should exclude public thoroughfares, which these 
commenters reasoned including could stretch the covered area further 
from a development than necessary. One commenter cautioned that 
including ingress/egress to an action may increase HUD or property 
owner liability for harm to residents occurring on roads off the 
subject property. This commenter stated that neither HUD nor borrowers 
are authorized or responsible for road conditions of the subject 
property, citing that a majority of flood-related fatalities occur on 
roads during floods.
    Several commenters urged HUD to address how the FFRMS applies to 
infrastructure projects by incorporating mitigation considerations 
(e.g., useful life, ingress/egress) and requirements for infrastructure 
projects in Sec.  55.20(e). These commenters asked HUD to mandate 
elevation for ingress and egress to flood-prone areas, as well as 
mitigation measures based on the site's entire landscape for critical 
utilities where elevation is not possible (e.g., stormwater). These 
commenters reasoned that the proposed steps in Sec.  55.2(b)(3) are 
insufficient because grantees increasingly use CDBG, CDBG-DR, and CDBG-
MIT funds to construct and improve bridges, water utility lines, and 
other critical infrastructure not subject to the structure-specific 
elevation requirements in Sec.  55.20, despite the preamble's 
recognition of the vulnerability of essential infrastructure to flood 
damage.
    HUD Response: HUD appreciates the commenters' support for the 
proposed changes to the 8-step decision making process to provide 
clarity and alignment with FFRMS. HUD recognizes that floodplain 
terminology can be confusing for grantees, applicants, and responsible 
entities and HUD intends to provide significant technical assistance 
and training to help ensure that practitioners are using the correct 
language to refer to various aspects of the floodplain.
    As described in the proposed rule, where CISA is unavailable to 
define the FFRMS floodplain, grantees, applicants, and responsible 
entities will use the 0.2-percent-annual-chance floodplain if it is 
available for non-critical actions and FVA +2 feet when it is not. Note 
that it is the FFRMS floodplain that will trigger the need for a 5- or 
8-step decision making process, regardless of the method used to define 
it. For critical actions, projects must utilize the higher of FVA +3 
feet or the 0.2-percent-annual-chance floodplain if it is available. 
HUD expects to provide training and technical assistance covering the 
various methods for defining the FFRMS floodplain along with the 8-step 
decision making processes to grantees, applicants, and responsible 
entities which should help them maintain compliance across their 
project portfolios. HUD disagrees that the 8-step decision making 
process is insufficient for infrastructure projects and notes that 
elevating infrastructure is often not practicable. In these cases, HUD 
requires infrastructure be floodproofed and protected through other 
means than strictly elevating it. CPD-17-013 outlines that critical 
infrastructure like bridges needs to be elevated or floodproofed to the 
0.2-percent-annual-chance floodplain. This is also in keeping with the 
FEMA requirements for critical facilities.
    HUD notes that the 8-step decision making process for critical 
actions does require projects to consider ingress and egress along with 
alternative locations for the project with the intent of removing it 
from the floodplain if practicable. Access to sites is vital to the 
functional use and safe evacuation of a site during a flood and 
therefore must be considered as part of the 8-step decision making 
process. HUD disagrees that consideration of ingress and egress will 
create any greater liability for property owners than otherwise would 
exist if they maintained unsafe conditions. Road conditions during a 
flood are not considered in this analysis beyond their ability to 
function as ingress and egress to a site.
C. Public Notice and Comment in Steps 2 and 7
    Several commenters urged HUD to shift the onus from residents 
having to look to newspapers or government websites to identify 
projects that may affect them. One commenter urged HUD to require 
providing comprehensive proposal details to impacted communities and 
soliciting their feedback in as many forms/methods necessary, beyond 
posting to a government website or newspaper. Several commenters urged 
HUD to shift notice and comment requirements to a community-led 
planning model, mandating earlier engagement of impacted communities, 
carried through project lifecycles. These commenters asserted that more 
substantive participation of impacted communities will: increase 
likelihood that residents will support projects and help to address any 
obstacles; improve community understanding of flood risks and how they 
can individually prepare; reinforce a sense of community; and lead to 
better project outcomes.
    One commenter specifically sought revisions to Sec.  55.20 to 
require that flood risk assessment and project design criteria steps be 
co-produced with impacted residents and require flood mitigation 
assessment to weigh community members' lived experiences (e.g., 
intended uses, flood susceptibility, population-specific concerns) 
equally with technical modeling assessments. This commenter explained 
that residents' familiarity with the property allows them to identify 
characteristics/

[[Page 30892]]

risks that site developers and engineers may otherwise miss, such as 
stormwater issues and critical ingress/egress.
    Several commenters sought clarification on the deadline meant by 
``earliest possible time of a proposal'' for sending required Initial 
Notice required under Sec.  55.20(b). In clarifying ``earliest possible 
time,'' these commenters asked HUD to consider a developer's planning 
process, explaining that developers would need detailed plans to 
prepare the initial notice and that developers may not be able to 
respond to comments until later in a project timeline. Another 
commenter asked if the proposed rule would change public notice 
publication timing.
    One commenter urged HUD to amend Sec.  55.20(b)(2) from providing 
``a minimum of 15 calendar days . . . for comment on the public 
notice'' to a minimum of sixty (60) calendar days, which this commenter 
stated will create no additional delay to the lengthy building process 
or economic harm, while providing necessary opportunity for public 
awareness.
    Several commenters expressed support for the option to publish 
Steps 2 and 7 notices on an appropriate government website as an 
alternative to local news outlets.
    Several commenters raised concerns that the public's lack of access 
to, or knowledge of, government-operated websites may decrease the 
efficacy of public notices. One commenter asked HUD to consider 
requiring publication in local newspapers circulated in print and 
online, characterizing this as a more practical alternative to 
government websites.
    Several commenters sought clarification on what classifies as an 
``approved government website'' for public notices and who at HUD would 
be authorized to ``approve'' websites. Several commenters asked if 
``government website'' refers to local, State, or Federal government 
websites. Commenters also asked HUD to clarify who at HUD has the 
authority to determine what is or is not an ``approved'' site. Several 
commenters asked HUD to detail the roles and responsibilities for 
public notice.
    Several commenters asked whether HUD would publish the 8-step 
analysis and Finding of No Significant Impact (FONSI) on HUD's website 
for public comment. One commenter asked what the required length of 
comment periods for a FONSI for choice-limiting actions under part 50 
would be and what the typical comment period length for these actions 
is. Another commenter asked HUD to describe its current notice and 
comment process for floodway projects under part 50 at both the 
environmental assessment and ``categorically excluded subject to'' 
levels of review.
    HUD Response: HUD appreciates commenters' feedback regarding the 
solicitation of public engagement through additional means other than 
government websites or newspapers; however, HUD will not currently 
expand the requirement. HUD recognizes that community outreach requires 
valuable time and resources and while HUD would hope that all affected 
community members participate in any public comment process, it cannot 
mandate participation. HUD follows the public engagement considerations 
as laid out in 24 CFR 50.4, 24 CFR 58.59 and 40 CFR parts 1500-1508 
where appropriate. While HUD appreciates anecdotal community input 
regarding flood risk and encourages projects to consider this 
information, HUD cannot rely solely only on this information for 
decision making. Because the 8-step decision making process for 
floodplains and part 55 compliance falls under laws and authorities at 
Sec. Sec.  58.5 and 50.4 for applicable project activities, grantees, 
applicants, and responsible entities must complete all parts of the 
process prior to engaging in any choice limiting actions. HUD field 
staff from the Office of Environment and Energy are available to assist 
in determining if it is the right time to publish their early notices 
under Sec.  55.20(b).
    HUD disagrees with the commenters' statement that increasing the 
early notice publication timeframe from 15 to 60 days would cause no 
additional project delays. HUD believes an increase of this magnitude 
at this time would cause significant project delays and provide little 
benefit for public awareness. HUD does not intend to increase the early 
public notice period at Sec.  55.20 to 60 days at this time.
    HUD appreciates the commenters' support for the use of government 
websites to distribute public notices under part 55. This rule requires 
that an official government website used for public notification must 
include accessibility features and languages necessary to ensure the 
affected community has access to provide meaningful public feedback. 
The rule clarifies responsibility for public notices falls to the 
responsible entities who complete the 8-step decision making process. 
HUD intends to provide grantees with necessary training and guidance to 
support their efforts at ensuring any government websites used are 
appropriate. Additionally, under Title VI of the Civil Rights Act of 
1964, Executive Order 13166, and in accordance with the U.S. Supreme 
Court ruling in Lau v Nichols,\41\ recipients of Federal financial 
assistance are required to take reasonable steps to ensure meaningful 
access to their programs and activities by LEP persons. This means that 
a government website would need to meet the accessibility requirements 
all HUD programs are subject to in order to be considered 
acceptable.\42\ The rule does not change the responsible entity's 
responsibility for publication.
---------------------------------------------------------------------------

    \41\ 414 U.S. 563 (1974).
    \42\ 68 FR 70968.
---------------------------------------------------------------------------

D. Clarifications and Recommendations
    One commenter expressed support for the proposed Step 4 impact 
evaluation language, while stressing that in addition to evaluating the 
impacts, the evaluation process must include mitigating loss of natural 
functions within the impacted watershed where avoidance is not 
feasible.
    Several commenters sought clarification in the rule of what 
information is needed to meet the requirement to demonstrate that 
runoff from a proposed development would not impact surrounding 
properties under Sec.  55.20(d)(1)(ii)(C), and whether it would be 
sufficient to document compliance with local requirements. These 
commenters explained that many local ordinances require total 
stormwater volume not increase from pre- to post-construction; however, 
the addition of fill to any floodplain will generally result in 
watershed changes, including increased stormwater volume.
    One commenter asked HUD to work with Federal partners to develop 
post-regulatory guidance and training to inform Steps 4 and 5 that 
clearly define: the values of floodplains, wetlands, and nature-based 
solutions; the ecosystem process/functions that generate these values; 
and the bio-geomorphology (ecological interactions between hydrology, 
geomorphology, and biology of floodplain environments) and attributes 
of ``functional'' floodplains. This commenter stated that the proposed 
rule and Guidelines for Implementing Executive Orders 11988 and 13690 
fail to adequately describe these values and attributes, resulting in 
this commenter regularly seeing local agencies incorrectly interpret 
``functional'' floodplains and allow projects to proceed that fail to 
protect and restore floodplain functions (e.g., planting grass for 
parks). This commenter explained the value of supported floodplain bio-
geomorphology, along with the four attributes that must be attained to

[[Page 30893]]

achieve it, that HUD should incorporate into guidance: (1) connectivity 
between the floodplain and its river/stream; (2) necessary timing, 
magnitude, duration, and frequency of flow from connected water source; 
(3) special scale; and (4) habitat and structural diversity.
    HUD Response: HUD appreciates the commenters' support for the 
proposed Step 4 impact evaluation language. HUD recommends that project 
specific environmental review questions be addressed by Regional and 
Field Environmental Officers from HUD's Office of Environment and 
Energy. HUD notes that the rule does not mandate how elevation is 
achieved and recommends that applicants concerned about runoff on their 
property utilize methods of elevation that do not increase surface 
flow.
    HUD intends to provide technical assistance and guidance to 
grantees, applicants, and responsible entities for all 8 steps of the 
8-step decision making process to help ensure compliance with E.O. 
11988, E.O. 11990, and E.O. 13690.
    Due to the potential for an increased regulatory burden, HUD does 
not intend to require grantees, applicants, and responsible entities to 
track the locations and quantities of growth and development in the 
floodplain over time as part of their 8-step analysis.
    HUD notes that Sec.  55.20(d)(ii)(C) does not forbid a project from 
impacting surrounding properties; however, those impacts must be 
considered and documented. HUD projects are required to follow all 
relevant laws and authorities.
E. Environmental Justice Requirements
    Several commenters expressed support for this provision as a step 
towards HUD's responsibility to address environmental justice and 
equity impacts of floodplain management and decision making processes.
    One commenter urged HUD to target robust technical assistance 
towards communities with limited resources to implement the 8-step 
decision making process.
    Another commenter urged HUD to engage the public in developing 
guidance, and for that guidance to address the following topics: (1) 
detail how HUD will weigh environmental justice impacts; (2) provide 
streamlined decision making for activities that mitigate flood risk or 
wetland loss or that provide co-benefits; and (3) detailed actions 
manifesting HUD's commitment to nature-based floodplain management 
approaches.
    One commenter raised concerns that the proposed environmental 
justice review provisions fail to mandate public participation and 
substantive analysis of proposed actions by including flexible language 
that incentivizes not engaging historically underrepresented 
communities in land decisions that impact them. Specifically, this 
commenter urged HUD to delete ``(if conducted)'' from Sec.  
55.20(f)(2)(iii) (``If the proposed activity is located in or affects a 
community with environmental justice concerns . . . the reevaluation 
must address public input provided during environmental justice 
outreach (if conducted) . . . .''). This commenter reasoned that 
permitting developers to forego environmental justice outreach where 
census data/mapping programs do not identify a community of concern 
inappropriately shifts the burden onto community members to identify 
and mitigate hazards and could result in HUD supporting development 
near hazardous sites that are not yet documented on a map. This 
commenter also stated that non-discretionary public outreach 
requirements align with other HUD rules, citing HUD's environmental 
justice worksheet's instruction that project planners should always 
mitigate environmental justice impacts.
    The same commenter also urged HUD to revise the proposed rule to 
clearly define the substantive analysis necessary to adequately conduct 
an environmental justice review, suggesting that HUD incorporate 
guidance from other administrative agencies, citing the EPA's Legal 
Tools to Advance Environmental Justice as an example. This commenter 
explained that analysis must account for the cumulative risks from all 
environmental hazards, beyond flooding itself, illustrating with the 
example that discriminatory zoning, concentration of hazardous uses, 
and disinvestment in infrastructure mean that when flooding occurs, 
communities also experience hazard contamination and harmful emissions 
from producers' increased emergency outputs.
    Several commenters stated that if the 8-step decision making 
process is part of a full environmental review, NEPA will address 
environmental justice information and discouraged requiring 
duplication.
    HUD Response: HUD appreciates the commenters' support for the 
proposed rule's steps towards addressing environmental justice and 
equity impacts of floodplain management and decision making processes. 
HUD intends to issue updated guidance for advancing environmental 
justice and coordinating public engagement under the 8-step decision 
making process with any ongoing engagements associated with 
environmental justice goals. Additionally, HUD created a new 
Environmental Assessment factor for environmental justice in 2022 which 
requires environmental review preparers to outline potential project 
impacts and mitigations for environmental justice.
    HUD disagrees that the requirement for engaging communities facing 
environmental justice issues inappropriately shifts the burden of 
identifying and mitigating hazards onto those communities that are not 
identified as communities of concern. HUD mandates public participation 
in the 8-step decision making process in Steps 2 and 7 which require an 
early and final public notice respectively regardless of the community 
affected. Feedback received as part of the public participation process 
is intended to inform decision making related to site locations and 
mitigation measures, but the responsibility for identifying and 
mitigating hazards is limited to HUD and the responsible entity. HUD 
also notes that environmental justice is a required consideration as 
listed at 24 CFR 50.4 and 58.5 and is not limited to part 55. The rule 
simply requires coordination of public outreach efforts if they exist.
Elevation and Floodproofing
A. Overall Resilience
1. Elevation Is Insufficient To Increase Flood Resilience
    Several commenters urged HUD to keep in mind that FFRMS is more 
than just an elevation standard, but rather a broad framework to 
increase flood resilience and preserve floodplains.
    One commenter urged HUD to focus more on the overall health of the 
floodplain itself rather than the ability of a structure to withstand a 
flooding event. This commenter said that focusing on the effects an 
activity has on floodplains and analyzing and mitigating for the 
benefit of the watershed effected would comply with the intent of E.O. 
11988 and E.O. 13690.
    One commenter asked HUD to revise the rule to encourage a wide 
range of resilience measures, to better conform with E.O. 13690's 
requirement that agencies use nature-based approaches wherever 
possible. This commenter reasoned that while the proposed elevation 
standards have a potential to significantly reduce damage, nature-based 
measures like wetlands restoration are more effective over a large 
area, in cost and environmental values, citing a case study comparing 
cost effectiveness of nature-based and coastal adaptation. Another 
commenter pointed out that ``resilience'' is not

[[Page 30894]]

defined in the proposed rule and that the elevation standards 
demonstrate a concern only for lost property rather than harm to people 
after a flood event.
    Another commenter noted that for some projects, including those 
deemed as ``critical'' (such as community assets like hospitals, fire 
stations, and water treatment facilities) elevation alone might not 
offer the most cost-effective or durable protections. This commenter 
urged HUD to require careful consideration for what constitutes 
``critical'' and assure protection of ingress, egress, and continued 
functioning rather than simply protection of the structure itself.
    One commenter urged HUD to draw a firm line against allowing 
``floodproofing'' in the FFRMS floodplain for any ``new'' build or 
substantial improvement, or alternatively, clarify that floodproofing 
through elevation be accomplished through pier and beam construction 
and not by pouring concrete slabs. The commenter noted that this was 
especially important given HUD's shift to CISA maps because, without 
additional funding, those maps could take many years to update and 
release. The commenter also believed that HUD's attempt to mitigate by 
adopting the 8-step decision making process is insufficient and would 
allow continued development within the current 1-percent-annual-chance 
floodplain maps.
    HUD Response: FFRMS is more than an elevation standard, it is a 
flood risk reduction standard designed as a flexible framework to 
increase resilience against flooding and help preserve the natural 
values of floodplains. Resilience in this context is the ability to 
withstand and recover quickly from flood events. HUD contends that 
increasing the resilience of the built environment through elevation 
standards decreases the risk to people who reside in those structures. 
HUD must account for the impacts of its actions and activities on 
floodplains and wetlands per E.O. 11990, E.O. 11988, and E.O. 13690. 
Many HUD programs like CDBG-DR and CDBG-MIT fund wetland restoration 
and nature-based solutions to flooding issues. HUD agrees with the 
commenter that nature-based solutions are an effective way to reduce 
damage and has added language in this final rule at Sec.  
55.20(c)(1)(ii) to encourage nature-based solutions as alternatives to 
avoid floodplain and wetland impacts. HUD also encourages the use of 
nature-based solutions where feasible as a resilience measure per the 
guidance found in the Community Resilience Toolkit.\43\
---------------------------------------------------------------------------

    \43\ Information on the Community Resilience Toolkit can be 
found here. https://www.hudexchange.info/resource/5981/community-resilience-toolkit/.
---------------------------------------------------------------------------

    HUD notes that the 8-step decision making process for critical 
actions does require projects to consider ingress and egress along with 
alternative locations for the project with the intent of removing it 
from the floodplain if practicable.
    HUD disagrees with the commenter that floodproofing fails to 
provide adequate flood mitigation for non-residential structures in the 
floodplain. HUD also notes that floodproofing can be done on any number 
of foundation types and does not require the use of poured concrete 
slabs. Additionally, HUD contends that CISA will provide a more 
realistic value for future risk than existing processes as it will 
address climate change over time. HUD disagrees that all development 
within the 1-percent-annual-chance floodplain should be forbidden so 
long as that development is subject to the requirements and 
protectiveness of a thorough evaluation through the 8-step decision 
making process.
2. Encouraging Use of Additional Resilience Strategies
    Several commenters suggested a different set of strategies beyond 
elevation for substantial rehabilitation that would allow for more 
design upgrades to promote flood resiliency rather than elevating 
alone.
    For example, some commenters recommended that HUD allow 
floodproofing to be used on residential buildings where there are units 
below the FFRMS floodplain. The commenters were concerned that the 
proposed rule could result in reducing the number of garden-style 
multifamily residential communities in urban locations that cannot 
comply with the elevation standards. The commenters went onto say that 
there are other ways such developments can support flood resiliency 
such as elevated machinery through design initiatives.
    One commenter recommended that HUD consider the characteristics of 
the specific floodplain in addition to flood stage. The commenter said 
that elevation should incorporate evacuation planning, including 
evacuation prior to a flood event for resident and first responder 
safety.
    Another commenter wrote to raise the importance of the 
International Code Council's model codes (``I-Codes''), which are 
developed in an open forum with a balance of interests represented and 
due process. The commenter strongly encouraged HUD to require numerous 
provisions within the I-Codes that provide flood mitigation benefits, 
including the latest International Residential Code and International 
Building Code, in order to ensure the most stringent flood provisions 
for federally assisted construction in flood zones and an enhanced 
level of resilience for both structures and communities. The commenter 
went on to emphasize that the National Institute of Building Sciences 
estimates that building to modern building codes saves $11 for every $1 
invested (including earthquake, flood, and wind mitigation benefits) 
and retrofitting structures to current flood mitigation requirements 
can provide $6 in mitigation benefits for every $1 invested.
    Another commenter supported the adoption of up-to-date modern 
building codes and standards and urged HUD to adopt the ASCE 7 Minimum 
Design Loads and Associated Criteria for Buildings and Other 
Structures, especially Chapter 5 Flood Loads.
    HUD Response: HUD believes that floodproofing alone is insufficient 
to protect residents in the event of a flood and therefore does not 
allow floodproofing of residential units. HUD contends that units at 
high risk of flood loss are not safe and do not contribute to HUD's 
mission of providing safe affordable housing.
    HUD appreciates the commenters' feedback regarding evacuation 
planning and notes that for critical actions, ingress and egress must 
be considered in the 8-step decision making process. HUD notes that 
additional hydrology characteristics of any individual floodplain and 
associated impacts should also be considered during the 8-step decision 
making process.
    While HUD appreciates the efforts of the International Code 
Council, ASCE and others to increase building resilience and the 
importance of building codes generally, HUD currently has no intention 
of adding them into the part 55 requirements. HUD is separately 
coordinating with an interagency group in an effort to address building 
codes for HUD-assisted properties.
3. Opposition to Resiliency Requirements
    One commenter suggested that because the proposed rule allows 
``floodproofing'' instead of elevation, for example, for parking 
garages, it would cause individuals to potentially lose access to not 
only their homes but also their vehicles during a major weather event. 
This commenter suggested this

[[Page 30895]]

impact would fall on low-income communities, that the proposed rule 
doesn't craft more resilient livable locations, and that HUD should 
draw a firm line against ``floodproofing'' in the FFRMS floodplain for 
any new build.
    Another commenter suggested that HUD's proposal unnecessarily 
expands floodplain management requirements and threatens access to FHA 
mortgage insurance programs for single family home buyers and 
multifamily builders. This commenter said that by establishing a higher 
flood risk standard, the proposed rule is inconsistent with NFIP and 
creates unwarranted and expansive flood mitigation requirements beyond 
those established by FEMA.
    HUD Response: HUD disagrees with the commenter regarding the use of 
floodproofing on structures where all of the residential units are 
elevated above FFRMS. HUD maintains that floodproofing structures 
allows for resilient development that keeps residential structures out 
of riskier locations without significantly reducing the availability of 
land for construction. This is also in keeping with existing HUD 
regulations under part 55 which allow for the floodproofing of 
structures that do not have residential units below the floodplain 
elevation.
    HUD disagrees that the rule unnecessarily expands floodplain 
management requirements. The increasing risk to housing structures and 
associated risks to human life posed by climate change are well 
documented. Under E.O. 11988, HUD is directed to protect the public's 
investment in housing and ensure a resilient housing stock. As such, 
HUD believes that increasing elevation standards for FHA backed new 
construction within the 1-percent-annual-chance floodplain is necessary 
in the Minimum Property Standards. As the Minimum Property Standards 
update is limited to the 1-percent-annual-chance floodplain, the 
horizontal extent of the floodplain of concern remains consistent with 
NFIP.
B. Use of Fill To Achieve Elevation Requirements
    Several commenters were concerned about the use of fill within 
floodplains. Some commenters emphasized that the use of fill could 
redirect flood waters onto other properties with existing structures or 
otherwise cause expansion of the mapped floodplain elsewhere. One 
commenter worried this impact could lead local municipalities to 
decline to support FHA-financed projects. Another commenter was also 
concerned that the elevation requirements may cause cities and counties 
to reject development of HUD-insured or HUD-assisted housing if the 
sites are required to be elevated above neighboring sites.
    Several commenters said that the proposed rule's floodproofing 
requirement for sites with no known or previously occurring flood risk 
will be prohibitively expensive. Some commenters noted it may result in 
reduced density allowable on the site to accommodate increased 
retention requirements and therefore a further reduction of property 
value. One commenter emphasized that elevation by fill has become 
common in the coastal plain of the Southeast and many communities have 
suffered worsening flooding and septic tank failures as a result of 
more water being pushed into their yards.
    Several commenters suggested alternatives where fill is necessary 
to achieve elevation requirements, such as requiring that a project 
retain the volume of water onsite that is equivalent to the volume of 
fill used. Another commenter suggested that HUD should consider 
alternatives that would allow exceptions through which the local 
Floodplain Administrator may provide input on other design 
considerations for promoting flood resiliency; elevating residential 
structures above the FFRMS should not be the only option. Another 
commenter asked HUD to include guidance for how to remedy if 
neighboring properties are negatively impacted by improvements. Another 
commenter asked that HUD include what type of information would be 
needed to demonstrate runoff from a proposed development would not 
impact surrounding properties.
    One commenter pointed out that using fill material to elevate 
structures will add significant cost to new construction including 
transport, earthwork, and compacting costs. Such an increase in costs, 
the commenter noted, might be passed onto low-income homeowners and 
renters.
    Several commenters urged HUD to prohibit the use of fill to achieve 
elevation requirements altogether.
    HUD Response: HUD agrees that use of fill within the floodplain can 
affect floodplain function. HUD notes that while the rule does increase 
elevation standards, it does not mandate the method by which elevation 
must be achieved. Under this rule, HUD would generally encourage 
grantees to use fill to elevate a site only where no other practicable 
alternative exists. Instead, HUD's preference is to elevate using 
methods that do not affect runoff of a site, such as piers or 
foundation walls. All project impacts, both on and offsite, must be 
addressed under the 8-step decision making process. It is up to the HUD 
or responsible entity environmental review preparer to propose 
mitigation measures which account for any impacts found during the 8-
step decision making process though regional HUD staff may be able to 
provide technical assistance on a project-by-project basis.
    According to the RIA, the cost of elevating and floodproofing 
structures is outweighed by the benefits of flood risk reduction and 
flood loss avoidance.
C. Cost and Feasibility of Elevation and Floodproofing Requirements
    One commenter felt that HUD provided compelling data that the 
benefits of the proposed two-foot-above standard far exceed the costs, 
and without a standard, property owners would tend to under-insure and 
under-mitigate relative to the flood risk.
    Another commenter argued, contrary to the proposed rule, that the 
cost of elevating properties is a financial burden to homeowners that 
would not be made up in saved insurance premiums. One commenter 
referenced HUD's RIA, which notes that the construction cost to elevate 
a new residential structure two feet does not pose a significant burden 
to small entities in the single family housing development industry and 
contended that more research is needed to come to that determination. 
The commenter cited one recent analysis that such costs are anywhere 
from $20,000-$80,000 and encouraged consideration of HUD's proposal to 
include the basement in the minimum elevation determination.
    One commenter expressed their concern that one-story homeowners 
would not be able to reserve their only floor for a non-residential use 
to reduce their compliance costs and do not have the same flexibilities 
as builders to locate new projects outside floodplains.
    One commenter noted that it is difficult to predict if the revised 
elevation standard is viable because land is forever shifting and 
changing, especially in wetlands.
    Some commenters expressed their concern that requiring existing 
structures to elevate to 2-feet above the BFE may result in significant 
pushback from borrowers especially those associated with low-income 
housing transactions. These commenters were concerned that as a result, 
needed repairs and upgrades to low-income housing will not happen thus 
placing an undue burden on existing low-income housing.
    Other commenters also expressed concern that it will be infeasible 
to

[[Page 30896]]

elevate an existing property to FFRMS elevation and so the inability to 
comply will leave housing stock in disrepair. Moreover, one commenter 
suggested that for the 40 percent of the U.S. population that resides 
in coastal communities--many of whom live in densely populated urban 
areas with limited alternative locations for development--raising a 
building several feet above BFE is not feasible. The commenter urged 
HUD to make exceptions where a building can be elevated above BFE but 
not as high as the FFRMS flood elevation.
    One comment focused specifically on communities that may have 
restrictions on building heights for multifamily developments. Since, 
in those cases, the proposed rule's increased elevation requirements 
may result in a development exceeding building height requirements, 
this commenter urged HUD to work with FEMA to develop incentives within 
the ``Community Rating System'' for building additional stories on 
multifamily buildings located in floodplains instead of building 
horizontally. The commenter suggested that additional stories may be 
possible if they would increase a building's Community Rating System 
rating and result in cost savings to the community.
    Several commenters asked for HUD to clarify how an existing 
multifamily structure with a basement could be practicably elevated 
above BFE.
    HUD Response: HUD appreciates the commenters' feedback regarding 
the benefits and costs of the BFE+2 elevation standard. HUD's RIA 
determined that the cost of the increased elevation standard would be 
outweighed by the benefits of flood risk mitigation including flood 
loss avoidance and flood insurance cost reductions. HUD believes the 
RIA reflects the best available economic data on costs associated with 
flood insurance and flood risk.
    HUD notes that per the rule, residential units will need to be 
elevated and not floodproofed for new construction and substantial 
improvement activities if they are located in the FFRMS floodplain. HUD 
disagrees that any potential changes in the land make it impossible to 
determine if the elevation standard is effective. HUD notes that non-
residential floors can be floodproofed without elevation.
    HUD contends that elevation and floodproofing of low-income housing 
is a needed repair or upgrade for these facilities, so funding spent on 
elevating and floodproofing these facilities is necessary. Any repairs 
that meet the threshold for substantial improvement as defined at Sec.  
55.2(b)(12) will trigger requirements for elevation. HUD does not 
currently have any plans to allow exceptions for buildings which can be 
elevated to BFE but not the FFRMS floodplain. HUD appreciates the 
feedback regarding populations living near the coasts as it highlights 
the need for the rule.
    HUD notes that HUD funded projects must also be in compliance with 
local ordinances including those on height restrictions for design. 
Additionally, the Community Rating System is a function of NFIP 
regulations which fall under the purview of FEMA. HUD has no authority 
to grant incentives under the Community Rating System.
D. Strategies To Restore and Preserve Beneficial Values of Floodplains 
and Wetlands
    Several commenters expressed support for HUD's commitment to 
nature-based floodplain management solutions through proposed Sec.  
55.20(e) and asked HUD to encourage projects to assess mitigation 
opportunities that restore natural floodplain and wetland functions 
proximate to project sites wherever practicable. One commenter 
expressed support for streamlining decision making for nature-based 
approaches.
    Several commenters explained that nature-based approaches retain 
excess water and slowly release it back to natural drainage systems 
while improving water and air quality, recreational function, heat 
mitigation, and property aesthetics (citing FEMA and National Wildlife 
Federation research). One commenter described the strategies deployed 
for three successful nature-based mitigation projects of varying 
scope--a wetland and shoreline stabilization project, a creek 
restoration project in a residential and business development, and a 
stormwater resilience project in a flood-prone residential 
neighborhood. Several commenters reasoned that this rule's focus on 
nature-based solutions aligns with Federal adaptation strategy outlined 
in E.O. 14072, E.O. 13960, and the Biden-Harris Administration's 
Roadmap to Accelerate Nature-Based Solutions, encouraging HUD to use 
the Roadmap and its companion resource guide to further identify 
specific practices proven effective.
    Several commenters encouraged HUD to include the following in 
mitigation guidance and training: (1) promote effectiveness of 
landscape-level practices encompassing the full property, including 
natural stormwater strategies (e.g., bioswales, retention ponds); (2) 
provide a suite of strategies flexible to meet varying site-specific 
needs; and (3) encourage no- or low-adverse impact development 
practices.
    Several commenters expressed support for HUD's efforts to better 
communicate the ecosystem services that natural systems provide through 
proposed Sec.  55.20(e)(3), defining restoration and preservation of 
wetlands and the beneficial functions of floodplains. One commenter 
provided an Association of State Wetland Managers manual prepared for 
agency floodplain management staff and others to assess, protect, and 
restore floodplain ``natural and beneficial'' functions.
    One commenter suggested that providing more details on the 
ecosystem services and economic benefits that wetlands and floodplains 
provide will increase public acceptance of the rule.
    HUD Response: HUD appreciates commenters' support for the nature-
based strategies identified in the new Sec.  55.20(e). HUD encourages 
the use of nature-based solutions where practicable across its 
portfolio. HUD agrees that nature-based solutions provide significant 
benefits and ecosystem services to the floodplain and wetland areas in 
and around projects.
    HUD not only encourages grantees to utilize nature-based solutions 
for floodplain management where possible, but Sec.  55.20(e) requires 
the restoration and preservation of the natural and beneficial 
functions of the FFRMS floodplain where practicable. HUD believes these 
projects can provide significant value to both people in the built 
environment and the floodplain. Additionally, HUD strongly encourages 
floodways to be returned to greenspace when feasible.
    HUD intends to provide guidance and technical assistance to 
grantees, applicants, and responsible entities to help them restore and 
preserve the natural and beneficial functions of the floodplain as part 
of their project. Additionally, HUD staff from the Office of 
Environment and Energy are available to help individual projects 
integrate mitigation into their projects.
E. Questions About Elevation and Floodproofing Requirements
    Commenters asked HUD to confirm that the requirement for elevation 
of a site to or above a 0.2-percent-annual-chance floodplain with no 
known or previously occurring flood risk will not result in the 
requirement for completion of the 8-step decision making process before 
adding fill to modify a floodplain per section Sec.  55.12(c)(8). If 
the 8-step decision making process would result, this commenter objects 
to the administrative burden it would place on

[[Page 30897]]

borrowers, lenders, and other stakeholders.
    One commenter asked whether FHA Multifamily will allow lenders to 
avoid the FFRMS requirements and add risk to FHA by building with non-
HUD funds and refinancing with FHA in a few years.
    Some commenters noted that they did not understand the need to use 
a FEMA Elevation Certificate or FEMA Floodproofing Certificate to 
document elevations when CISA mapping is used because these tools are 
used in conjunction with FEMA maps rather than CISA maps.
    Commenters also asked HUD to clarify what it means by ``by other 
means'' and ``from time to time'' when discussing documentation of 
elevation to avoid inconsistent or unequitable prescription of unknown 
data requirements.
    Another commenter suggested HUD adopt the standard jointly 
developed by the Association of State Floodplain Managers, the USACE, 
and FM Approvals for floodproofing non-residential areas below the 
FFRMS floodplain elevation, which has existed for about 10 years and 
ensures that floodproofing products perform as designed and advertised.
    HUD Response: The rule removes the exemption for LOMA/LOMR from 
Sec.  55.12(c)(8). Additionally, LOMAs/LOMRs do not remove sites from 
the FFRMS floodplain. As such, sites within the FFRMS floodplain will 
be subject to part 55 including, potentially, a full 8-step decision 
making process. While HUD encourages local and State authorities to 
match HUD regulations where possible, HUD cannot regulate projects that 
fall outside the Federal nexus and do not receive HUD funding.
    FEMA elevation certificates, floodproofing certificates, or other 
documentation as directed by HUD, provides the official elevation of 
structures. This elevation is necessary to compare structures with the 
FFRMS floodplain and determine if they are subject to part 55 and/or 
any elevation mitigation requirements. HUD programs must also follow 
any local or State requirements for documenting elevation if they 
exist. HUD notes that any documentation HUD directs the use of must at 
least meet the minimum elevation requirement of the FFRMS floodplain. 
HUD appreciates the commenter's thoughtful ideas and considerations for 
use of floodproofing standards; however, this rule requires alignment 
with FEMA's floodproofing standards at 44 CFR 60.3(c)(3)(ii) and 
60.3(c)(4)(i).
    The FHA Multifamily program strongly discourages lenders building 
with non-HUD funds and refinancing with FHA later to skirt HUD 
requirements as the FFRMS requirements under this rule are critical to 
protecting the safety of HUD-assisted residents and the long-term 
resilience of HUD investments.
F. Additional Recommendations for Elevation and Floodproofing 
Requirements
    One commenter recommended that tested and certified engineered 
flood barriers be used for floodproofing, where applicable. This 
commenter also recommended that HUD amend its proposed rule to be 
effective for the ``lowest habitable'' floor of the building.
    One commenter suggested that funding be provided via FEMA to 
provide low interest loans for house raising. The commenter noted the 
average cost of house raising is over $100,000.
    One commenter recommended that HUD incorporate a requirement that 
parking areas be built to the BFE to ensure a consistent practice that 
can be anticipated by all stakeholders during project planning.
    One commenter emphasized that the residents of communities impacted 
by floods possess a right of return consistent with human rights law 
that must be honored. The commenter said that such residents should be 
provided assistance in recovering via programs such as CDBG-DR.
    One commenter recommended that HUD make it clear that elevation 
requirements apply to the new installation of manufactured housing. The 
commenter urged HUD to prioritize department-wide actions that increase 
climate resilience for manufactured housing, including facilitating 
public investments in flood adaptation projects that would protect 
manufactured housing, mandating stricter building codes including 
foundation anchoring standards, increasing access to Disaster Recovery 
funds, and creating incentives to move manufactured housing to safer 
sites outside of the FFRMS floodplain. Citing several studies, this 
commenter explained that manufactured and mobile homes have a higher 
risk of flooding than other housing types due to location and 
foundation types; and that natural disasters disproportionately 
adversely affect these residents due to limited legal protections, 
limited access to disaster relief, and higher poverty rates and 
mobility limitations.
    One commenter encouraged HUD to implement enhanced construction 
standards consistently across its programs. The commenter said this 
would reduce complexity and increase programmatic efficiency.
    One commenter recommended HUD exclude FHA multifamily mortgage 
insurance programs from the FFRMS and any elevation and/or flood 
proofing requirements outside of the 1-percent-annual-chance 
floodplain. This commenter pointed out that HUD's Office of Multifamily 
Housing already promotes resilience against flooding in the absence of 
a new FFRMS, and these changes, as well as State and local code 
requirements, increase resiliency for FHA-insured multifamily 
properties without the confusing and costly FFRMS requirements. This 
commenter urged HUD to defer to State and local governments to decide 
what resiliency measures are necessary and workable for multifamily 
developments in their communities, especially if those properties are 
not HUD-funded or HUD-assisted. This commenter reasoned that State and 
local governments typically adopt nationally recognized model codes, 
tailored to reflect local practices and needs, and that residences are 
built to these codes to withstand natural hazards while maintaining 
affordability.
    HUD Response: HUD appreciates the commenter's thoughtful ideas and 
considerations for alteration of this section of the rule; however, 
currently, HUD has no plans to adopt any floodproofing or enhanced 
construction standards. Additionally, HUD does not intend to exclude 
FHA multifamily programs from FFRMS. HUD notes that HUD funded projects 
are required to comply with local and State regulations where they 
exceed the HUD minimum standards.
    HUD notes that it has no control over FEMA's budget or funding 
program design. HUD also notes that CDBG-DR is funded through 
individual supplemental appropriations and, when available, grantees 
have broad discretion in determining how to use the funds. Homeowners 
that apply for CDBG-DR funding through grantee-run programs and are 
deemed ineligible for assistance are still welcome to fund their own 
repairs.
    HUD does not believe that parking areas need to be built to BFE. 
While HUD would encourage projects to build outside of the 1-percent-
annual-chance floodplain where practicable, HUD does not believe it is 
necessary to elevate parking lots.
    HUD appreciates the commenters' request to make it clear that 
elevation requirements apply to the installation of new manufactured 
housing that is subject to part 55. HUD has historically interpreted 
the rule related to the

[[Page 30898]]

installation of new HUD-assisted MHUs to be equivalent to the building 
of new site-built homes under part 55. This would mean that elevation 
requirements for site-built homes also apply to MHUs subject to part 
55. That being said, HUD has decided to revise the rule to clearly 
state that new siting and substantial improvements of MHUs are included 
in the part 55 definitions of new construction and substantial 
improvement, respectively. Additionally, HUD intends to provide 
subregulatory guidance and technical assistance focused on MHU 
elevation requirements. HUD also notes that facilitating public 
investments in flood adaptation projects that would protect 
manufactured housing, mandating stricter building codes including 
foundation anchoring standards, increasing access to Disaster Recovery 
funds, and creating incentives to move manufactured housing to safer 
sites outside of the FFRMS floodplain all fall outside the scope of 
this rulemaking.
    As discussed earlier in this preamble, it is important to note that 
FHA-insured single family housing is not subject to part 55 and that 
FHA-insured single family manufactured housing is not subject to the 24 
CFR 200.926d elevation standards of this final rule. Eligibility 
requirements, including elevation requirements, for FHA-insured 
manufactured housing can be found at 24 CFR part 3285: Manufactured 
Home Installation Standards and 24 CFR 203.43f: Eligibility of 
Mortgages Covering Manufactured Homes, as applicable, which are outside 
the scope of this rulemaking.
Existing Nonconforming Sites in Sec.  55.21
    Several commenters expressed general opposition towards HUD's 
proposed process for existing nonconforming sites. One commenter urged 
HUD to seriously consider disallowing construction and reconstruction 
within the floodway altogether. Another commenter remarked that Sec.  
55.21 appears to be a backdoor for HUD to continue subsidizing risky 
properties. This commenter felt that the provision was too vague and 
asked a number of questions such as: whether it will apply to buildings 
built in violation of NFIP or State, local, or Tribal law or 
ordinances; whether it will apply to buildings below the current FFRMS 
standard; how will financial risk be assessed for FHA projects; will it 
apply to hospitals and nursing homes; how will ingress and egress be 
analyzed; will HUD coordinate with first responders and emergency 
rescuers; will it apply to buildings with a history of flooding; how 
much staff time will it take to conduct this process and would that 
time be better used finding a safe site; whether HUD believes 
properties with improvements in floodways comply with the requirements 
of 24 CFR 5.703, especially paragraphs (a) and (f) and whether HUD is 
waiving 24 CFR 5.703 for applicable programs as well; and whether there 
is potential for greater litigation. The commenter said that this 
provision keeps the most vulnerable in harm's way and recommended it be 
removed from the final rule.
    Several other commenters asked for clarity surrounding the process 
for existing nonconforming sites. One commenter said they found the 
change to Sec.  55.21 confusing and asked whether the change means that 
HUD will continue to assist properties in the floodway in violation of 
its own regulations. Another commenter said the language of Sec.  
55.21(b) is confusing and potentially misleading and asked whether HUD 
would allow buildings with residential units to occupy the floodway as 
long as the individual units are out of the floodway or whether HUD 
will exclude buildings containing residential units from occupying the 
floodway. Additionally, this commenter asked how HUD will ensure 
building foundations that remain in the floodway are safe. Another 
commenter wanted clarity as to what stage HUD would be conducting a 
``close look'' at the site to determine whether to continue assistance. 
This commenter was concerned that applicants will be reluctant to 
proceed with applications without assurance that HUD mortgage insurance 
will be possible. Other commenters asked whether HUD has examined its 
FHA and public housing portfolios to understand how many floodway 
projects will be subject to the ``very rare'' process. This commenter 
asked whether the alternative process would be used in lieu of 
oversight and whether any engineers or building science experts were 
involved in formulating this proposed provision.
    Several other commenters supported the proposed provisions relating 
to existing nonconforming sites. One commenter wrote that they strongly 
believe that housing preservation and sustainability are complementary 
and that they recommend HUD pay particular attention to the 
preservation of existing affordable housing units and the buildings in 
which they reside. Another commenter welcomed HUD's proposal to address 
repeatedly flooded properties and urged HUD to pay close attention to 
repair and reconstruction of multifamily units and to prioritize new 
protections in communities where residents have been displaced, lost 
belongings, and required evacuation and rescue. This commenter 
emphasized that HUD should pay particular attention to communities 
where such existing structures are a significant portion of the 
affordable housing stock.
    Several other commenters had recommendations for how to change or 
improve the existing nonconforming site process. One commenter 
recommended that the footprint of any building located in a FEMA 
floodway not be allowed to increase in size for rehabilitation 
purposes. This commenter also discouraged HUD from demolishing existing 
buildings and instead supported conducting detailed risk assessments to 
determine the viability of elevation, floodproofing, and relocation. 
Another commenter urged HUD to defer to NFIP or local regulations for 
actions within a floodway. Another commenter also suggested that an 
effective form of mitigation can be the implementation and enforcement 
of modern building codes for properties being rebuilt due to repetitive 
losses. Another commenter encouraged HUD to provide funding for buyouts 
with relocation assistance for properties experiencing repeated loss 
due to flood damage. This commenter supported HUD policies that 
increase resilience of existing housing stock but asked HUD to 
recognize that that is a short-term, temporary measure and that HUD 
should work towards the long-term goal of eliminating more housing in 
places at risk of flooding and erosion.
    HUD Response: HUD appreciates the commenters' feedback regarding 
the updates to Sec.  55.21. HUD intends to produce additional guidance 
and technical assistance to help provide context for when the exemption 
at Sec.  55.21 should apply. Generally, HUD intends this alternative 
processing for existing nonconforming sites to be rarely authorized and 
only under limited circumstances. While HUD has not created an 
inventory of projects where this rule may be applicable, HUD is 
responsible for ensuring continued compliance with NEPA and part 55 via 
monitoring and other tracking mechanisms. HUD is also developing an 
internal dashboard for environmental review data that will provide 
additional information on project location and part 55 compliance over 
time. Regulatory rigidity can be useful in many circumstances but 
having limited flexibility to allow certain projects to receive 
necessary repairs/upgrades ensures that HUD avoids placing undue 
burdens on existing HUD-assisted or -insured housing.

[[Page 30899]]

    HUD disagrees that this provision will keep the most vulnerable 
populations in harm's way. HUD contends that by requiring all 
residential units be removed from the floodway, completion of the 8-
step decision making process, and incorporation of all practicable 
measures to meaningfully reduce flood risk and increase resilience, 
residents will be protected from future harm. HUD intends to review 
projects on a case-by-case basis and reserves the right to refuse to 
approve the project if it believes mitigation is inadequate to reduce 
the risk sufficiently for resident safety. This alternative processing 
for existing nonconforming sites is not intended to be used in lieu of 
oversight at any particular property and it should be noted that the 
NSPIRE inspection standards require grantees to ensure that all 
residents live in safe, habitable dwellings, and that the items and 
components located inside the building, outside the building, and 
within the units of HUD housing are to be functionally adequate, 
operable, and free of health and safety hazards.
    HUD appreciates the commenter's sentiment that housing preservation 
and sustainability are inextricably linked and complimentary of one 
another. HUD also appreciates the feedback from the commenter regarding 
FEMA designated SRL properties, and HUD agrees that communities with a 
high percentage of SRL properties are worth particular attention. These 
properties represent some of the highest risk and HUD wishes to ensure 
any Federal investment is well protected.
    HUD appreciates the commenter's thoughtful ideas and considerations 
for alteration of this section of the rule. HUD has revised the 
language of Sec.  55.21 to provide additional clarity and to more 
explicitly state that all residential units are required to be removed 
from the floodway under this provision.
    HUD does not expressly forbid the expansion of buildings in the 
floodway under Sec.  55.21; however, any expansion would need to meet a 
strict set of minimum standards including no residential units, 
identified evacuation routes, a no-rise certification (as defined by 
FEMA), and elevation to the FFRMS floodplain. Additionally, HUD may 
impose any other requirements it deems necessary to ensure the safety 
of the structure and its occupants. HUD contends that while the section 
doesn't forbid construction, the requirements laid out will make it 
exceptionally difficult to expand a building in the floodway. The 
purpose of Sec.  55.21 is to allow existing buildings to continue to 
provide safe housing to residents where no feasible alternatives 
currently exist. HUD notes that changes in local building codes or 
funding of additional buyout programs exist outside the scope of this 
rulemaking and require either local governance or acts of Congress to 
fund.
Minimum Property Standards for 1-4 Unit Residential Structures
    Several commenters expressed support for the proposed elevation 
standards for the FHA Minimum Property Standards. One commenter 
predicted that the new standards would likely decrease flood losses for 
families who may be particularly impacted by flooding as they do not 
have the resources to respond or recover. Another commenter urged HUD 
to work with the White House Flood Resilience Interagency Working Group 
to monitor whether the new standard will adequately protect the 
structures in question. Another commenter supported the BFE plus two 
feet proposal but said that the 0.2-percent-annual-chance flood 
approach would be even better. Another commenter hoped that the new 
elevation standards would incentivize adoption of a freeboard standard 
matching the HUD Minimum Property Standard to ensure that all new 
development in special flood hazard areas will continue to qualify for 
FHA-insured mortgages. The commenter emphasized that such a result 
would have a tremendous positive impact on improving nationwide 
resilience to flooding.
    One commenter supported the new standards but noted that they may 
be unachievable by certain properties such as row houses and small lots 
in high-cost areas where substantial improvements may be cost 
prohibitive especially for low and middle-income homeowners. This 
commenter went on to encourage HUD to look to a wider suite of 
mitigation measures in such circumstances, such as elevation of 
mechanical systems and installation of backwater valves, which can 
improve resilience while also being more cost effective. Additionally, 
this commenter noted that new elevation standards could impact building 
height limitations and recommended that the revised regulations 
acknowledge that building height may need to be measured on an 
appropriate reference plane that is not the ground surface to support 
resilient construction without putting undue restrictions on building 
height.
    One commenter asked HUD to revise the proposed rule to make the 
standards for elevation consistent for site-built and manufactured 
homes. This commenter said that current NFIP standards measure the 
elevation of site-built homes from the bottom of the lowest floor but 
measure the elevation of manufactured homes from the bottom of the I-
beam. The commenter noted that the space between the I-beam and the 
lowest floor in a manufactured home is usually used for insulation and 
duct work, which would be expensive to move versus the cost of the 
extra elevation of the home. The commenter did not see any evidence to 
support a higher BFE measurement for manufactured homes and said if the 
standards were more uniform, it would help manufactured home properties 
meet the BFE requirements.
    One commenter pointed out that HUD's proposed rule speaks to 
substantial improvements but does not speak to requirements for repairs 
to homes that are substantially damaged by flooding. This commenter was 
concerned about the costs of elevating an existing home an additional 
two feet following substantial damage, especially given that NFIP's 
Increased Cost of Compliance coverage only provides up to $30,000 for 
such elevation. Another commenter also expressed concern that elevating 
a site may negatively impact adjoining sites as previously established 
draining patterns will be altered, which could lead to objections by 
local municipalities and rejection of FHA-financed projects.
    Another commenter was concerned that even the new proposed Minimum 
Property Standards were inadequate. This commenter suggested that new 
construction within the floodplain should be avoided, and existing 
structures should be removed over time. The commenter went on to 
suggest that HUD's final rule also include an option or incentive for 
managed retreat from floodplains whereby new construction in a 
floodplain is prohibited, and once a HUD-funded property experiences a 
loss from flooding it should be given the opportunity for a buyout or a 
one-time replacement for existing loss plus a withdrawal of future 
Federal funding for the property. The commenter suggested that the 
managed retreat option is cost-effective, would reduce disaster loss 
and displacement of tenant and owners, and would improve tenant safety 
and the quality of floodplain function.
    One commenter emphasized the need for a consistent Federal 
narrative on the required minimal development standard for constructing 
or insuring a structure with known flood risk, noting that the minimal 
standard for communities within an NFIP SFHA is the lowest floor at or 
above the BFE. This commenter was concerned about the potential for 
confusion if HUD changes its Minimum

[[Page 30900]]

Property Standards to two feet above BFE.
    One commenter requested to see the proposed rule as it will be 
implemented--at least at 90 percent completion--prior to final 
publication in order to provide final comments.
    HUD Response: HUD appreciates the commenter's feedback regarding 
the proposed elevation standards in the FHA Minimum Property Standards 
update. HUD agrees that updated standards should reduce flood losses 
for structures residing in the 1-percent-annual-chance floodplain. HUD 
intends to continually monitor this regulation along with all of its 
regulations to ensure they are having the intended impact. It should be 
noted that the update to the Minimum Property Standards elevation 
requirements is only regulated within the FEMA-mapped 1-percent-annual-
chance floodplain and that the FFRMS floodplain requirements outlined 
in the part 55 update would not apply to FHA-insured single family 
mortgages.
    HUD appreciates the commenters' feedback about properties where 
elevation may be difficult or infeasible. HUD contends these 
difficulties are present in only a limited number of structures 
substantially improved through FHA-insured loans which sit in the FEMA 
mapped 1-percent-annual-chance floodplain. To avoid this issue, HUD has 
removed elevation requirements for substantial improvement activities 
from the Minimum Property Standards update. While newly constructed 
units purchased with FHA-insured mortgages would still be subject to 
the elevation requirements, this change would alleviate much of the 
concern facing homeowners of existing structures which may need to 
undergo substantial improvements. HUD also contends that not all 
Federal programs fund the same types of projects; therefore, not all 
Federal agencies need to regulate to the same elevation requirements. 
HUD also notes that some programs, such as CDBG-DR, have already 
imposed higher elevation standards than the NFIP minimums for years. 
The increased elevation standard for FHA-insured single family new 
construction will increase the nation's resilient housing stock and 
help protect the communities that HUD serves.
    Also, HUD notes that FHA-insured single family manufactured housing 
is not subject to part 55 or 24 CFR 200.926d elevation standards under 
the final rule. Flood elevation standards for FHA-insured manufactured 
housing can be found at 24 CFR 3285: Manufactured Home Installation 
Standards and 24 CFR 203.43f: Eligibility of Mortgages Covering 
Manufactured Homes, as applicable, and are outside the scope of this 
rulemaking.
    Further, for both manufactured homes and stick-built homes subject 
to part 55, to determine the lowest floor, HUD looks to FEMA's 
regulations in 44 CFR 59.1 and FEMA's Elevation Certificate guidance or 
other applicable current FEMA guidance. For manufactured homes in A 
Zones, FEMA recommends measurement of MHU elevation from the I-beam as 
a best practice. HUD recommends following FEMA best practice where 
feasible. For manufactured homes in coastal high hazard areas (Zone V), 
FEMA requires measurement of MHU elevation from the bottom of the 
lowest horizontal structural member (e.g., the I-beam).
    HUD strongly disagrees that elevation inherently impacts drainage 
patterns on a given lot. HUD does not require elevation to be completed 
using any particular method and there are many methods that have no 
impact on the impervious surface or general slope of a lot. For 
example, homes may be elevated using pier and beam, knee wall, or crawl 
space construction methods.
    While HUD appreciates the commenters' sentiment that new 
construction within a floodplain should be avoided, the need for new 
affordable housing nationwide can necessitate construction in these 
areas. HUD feels that a ban on new construction in all floodplain areas 
would have a significant impact on affordable housing availability. 
Instead, while HUD agrees that avoidance is generally preferred to 
mitigation, HUD also believes in resilient design and ensuring that 
construction which does occur is done with appropriate resilient 
measures. Managed retreat through buyout is an allowable option for 
local jurisdictions to utilize under existing rules. It should be noted 
that the rule is intended to incentivize floodplain restoration and 
preservation activities via an existing exemption from part 55 
applicability for such activities. Funding and program eligibility for 
programs and projects focused on buyout or managed retreat fall outside 
the scope of this rulemaking and require changes to individual program 
regulations and/or Congressional funding acts to proceed.
    HUD will not release an additional 90 percent draft proposal of the 
rule for public comment. HUD intends to continuously update and monitor 
all of its rules and regulations as it sees fit to ensure the continued 
pursuit of its missions and directives. This includes continued 
discussions with Federal interagency partners and the White House Flood 
Resilience Interagency Working Group that may provide useful outside 
perspectives on any shortcomings or limitations of existing 
regulations.
A. Question for Public Comment #7: Feedback on the Proposed FHA Single 
Family Minimum Property Standards
    Several commenters supported HUD applying the same FHA single 
family Minimum Property Standards as were proposed in 2016.\44\ One 
commenter wrote that existing HUD programs, such as CDBG-DR and FHA 
Multifamily programs, already demonstrate that higher elevation 
standards are practicable. Another commenter wrote that adopting FHA 
single family elevation standards consistent with what exists for the 
Multifamily and CDBG programs will increase equity. This commenter 
suggested that not expanding higher floodplain management standards 
across all HUD programs may exacerbate inequities and unacceptably 
suggest that residents of affordable housing must inevitably tolerate 
elevated flood risk.
---------------------------------------------------------------------------

    \44\ 81 FR 74967. In the 2016 proposed rule, the Minimum 
Property Standards would have relied on an FVA approach requiring 
elevation of new construction and substantial improvement to two 
feet above the base flood elevation.
---------------------------------------------------------------------------

    Another commenter encouraged HUD to engage with additional 
scientific and model experts, home builders and developers, community 
officials, lenders, realtors, consumer groups, and other Federal 
agencies before changing how it determines which homes are subject to 
the Minimum Property Standards requirements. This commenter recognized 
that single family homes in many communities face the potential for 
increased severity and frequency of flooding events due to climate 
change but was concerned that more certainty around the proposed FFRMS 
floodplain approach is needed before major housing programs are 
impacted.
    One commenter asked HUD to exempt FHA single family newly 
constructed and substantially improved structures located within the 1-
percent-annual-chance (100-year) floodplain from any elevation and/or 
flood proofing requirements.
    HUD Response: HUD appreciates the feedback received from commenters 
regarding changes to the Minimum Property Standards. While HUD agrees 
that higher standards can be more protective, HUD contends that they 
can also be more burdensome. HUD wishes to avoid creating an undue 
regulatory burden by creating too high a regulatory

[[Page 30901]]

floor through the Minimum Property Standards thereby potentially 
impacting the availability of affordable housing. HUD does not believe 
that FHA single-family newly constructed homes should be exempt from 
this rule. However, based on feedback received, HUD will require that 
the lowest floor be at least two feet above base flood elevation for 
new construction, as proposed, but will remove the requirement for 
elevation of substantially improved homes under the Minimum Property 
Standards. With this change, the elevation standard in this rule 
provides a substantial increase in protection without being 
unreasonably costly or creating an undue hardship on homeowners and 
builders as confirmed through the RIA and review of multiple 
alternatives to the rule.
Regulatory Impact Analysis
    One commenter stated that HUD's RIA falls short of its mandate 
under E.O. 12866 because it does not analyze the most readily available 
alternative to this proposed rule, which is to raise the elevation 
standard one-foot-above instead of two. This commenter suggested HUD 
re-release the proposed rule with this analysis before publishing a 
final rule. Moreover, this commenter said that HUD also used a 2013 new 
construction study to calculate the costs of retrofitting existing 
homes, despite recognizing that the cost for substantial improvement 
projects is significantly higher than for new construction.
    The same commenter suggested that HUD measured the proposed rule's 
benefits using the decreased insurance premiums from an outdated and 
inaccurate methodology that has been replaced by Risk Rating 2.0. 
Several other commenters also wrote in regarding FEMA's Risk Rating 2.0 
program. One commenter requested that HUD support the reinstallation of 
flood insurance premium discounts for buildings mitigated through 
elevation or floodproofing within the Risk Rating 2.0 program. The 
commenter said these discounts are effective in driving mitigation to 
reduce flood risk and incentivize mitigation to at-risk buildings.
    One commenter recommended that HUD conduct a study of the potential 
future impacts of implementing the new standards before issuing a final 
rule. This commenter expressed a lack of confidence in HUD's summary 
view that the impact is minimal in relation to the actual costs to 
elevate a home--particularly an existing home--under local building 
codes and Federal regulations. One commenter noted that the real-world 
impacts on individuals protected from flood related harms were not 
factored into the damage reduction found through HUD's regulatory 
impact analysis.
    Another commenter noted that the Risk Rating 2.0 premium reductions 
for elevating properties should be more transparent. This commenter 
also noted HUD should consider working with FEMA to clarify financial 
benefits of elevating properties on flood insurance premiums. Following 
up on comments made during a listening event, another commenter stated 
that the expected 30 percent reduction in flood insurance described in 
the RIA resulting from building a home to base flood elevation plus 
one, is incorrect. The commenter also stated that HUD has not been 
transparent with the formula for calculating Risk Rating 2.0 pricing 
and so there is no easy way to determine if the 30 percent is accurate 
or inaccurate without obtaining full quotes. The commenter then 
attached multiple supporting documents that outline an example 
structure receiving flood insurance rate discounts for elevation that 
are lower than expected elevation discounts provided in the RIA.
    One commenter requested more detailed information as to all aspects 
of the cost benefit analysis completed for the proposed rule that 
relate to the value of requiring flood coverage up to the full 
replacement cost of a building compared to a lesser degree of flood 
insurance. The commenter asked for more information regarding the value 
of full replacement cost coverage versus limiting the amount of flood 
insurance. Another commenter also requested more detail in the RIA (and 
in the FONSI) before a final rule is implemented. This commenter would 
like stakeholders to have access to CISA mapping, and clearer 
information as to when increased flood insurance requirements would 
apply.
    Another commenter asked for clarification because the proposed rule 
states that CISA methodology would be the required methodology to 
define the FFRMS floodplain ``if HUD-approved maps are available''; 
however, the RIA describes the process as the developer being able to 
enter the project location, the anticipated life of the project, and 
the project criticality to generate an appropriate amount of climate-
informed freeboard.
    HUD Response: HUD disagrees with the commenter that the RIA falls 
short of meeting its mandate in E.O. 12866. According to the Mitigation 
Framework Leadership Group (MitFLG), BFE+2 is the recommended elevation 
height for Federal projects. This elevation standard provides a 
substantial increase in protection without being unreasonably costly or 
creating an undue hardship on homeowners and builders. The RIA reviewed 
multiple alternatives to the proposed rule and determined this was a 
viable option. The RIA used the best available data to make its 
determination. More recent peer reviewed studies utilizing FEMA's new 
Risk Rating 2.0 remain unavailable at time of writing and cannot be 
used to ascertain any better information. Given the unclear outlook of 
the future of Risk Rating 2.0, HUD felt it was prudent to leave out 
more recent, incomplete, and unvetted sources from its determination. 
HUD also notes that calculating damage loss avoidance can be difficult, 
particularly as it relates to human impacts.
    HUD supports its Federal partners' efforts to increase the 
resilience of housing nationwide and believes that FEMA will have good 
cause to support any rating system used by NFIP. HUD has no direct 
authority over the management or implementation of elevation discounts 
for flood insurance policies. The discounts used in the RIA are based 
on the best available information and studies at the time of HUD's 
review. HUD has published all available information used in its 
decision making in the RIA attachment to the proposed and final rule. 
HUD encourages stakeholders to review CISA mapping tools as they become 
available from FEMA and NOAA and other Federal sources. Alternatively, 
HUD has revised the rule to clarify its position that it permits the 
voluntary use of formally adopted State, Tribal, and local CISA data, 
as described in Sec.  55.7(f) and section II.B. of this preamble.
    HUD intends to produce implementation guidance for grantees, 
applicants, and responsible entities to help them correctly utilize 
available tools to implement CISA. Additionally, HUD intends to provide 
technical assistance training to help grantees walk through 
particularly difficult cases.

V. Findings and Certifications

Regulatory Review--Executive Orders 12866, 13563, and 14094

    Under E.O. 12866 (Regulatory Planning and Review), a determination 
must be made whether a regulatory action is significant and, therefore, 
subject to review by the Office of Management and Budget (OMB) in 
accordance with the requirements of the order. E.O. 13563 (Improving 
Regulations and Regulatory Review) directs Executive agencies to 
analyze regulations that are ``outmoded, ineffective, insufficient, or 
excessively burdensome, and to modify, streamline,

[[Page 30902]]

expand, or repeal them in accordance with what has been learned.'' E.O. 
13563 also directs that, where relevant, feasible, and consistent with 
regulatory objectives, and to the extent permitted by law, agencies are 
to identify and consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public. E.O. 14094 
(Modernizing Regulatory Review) amends section 3(f) of E.O. 12866, 
among other things. This final rule was determined to be a significant 
regulatory action under section 3(f) of Executive Order 12866 as 
amended by Executive Order 14094 but was not deemed to be significant 
under section 3(f)(1).
    As discussed in this preamble, the regulatory amendments will, 
based on E.O. 13690 and the Guidelines, require, as part of the 
decision making process established to ensure compliance with E.O. 
11988 (Floodplain Management), that new construction or substantial 
improvement in a floodplain be elevated above the FFRMS floodplain or 
floodproofed. HUD notes that 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.). These amendments will 
also provide a process for determining the FFRMS floodplain that would 
establish a preference for the climate-informed science approach. This 
final rule also revises HUD regulations in various other ways, 
including permitting HUD assistance to be used for a broader range of 
reasonable activities in floodways and would allow improvements beyond 
maintenance at sites with onsite floodplains in exceptional 
circumstances, after completion of the 8-step decision making process. 
This final rule also revises HUD's Minimum Property Standards for one-
to-four-unit housing to require that the lowest floor in newly 
constructed structures located within the 1-percent-annual-chance 
floodplain be built at least 2 feet above the base flood elevation. 
Additionally, this final rule also revises a categorical exclusion 
available when HUD performs the environmental review by making it 
consistent with changes to a similar categorical exclusion that is 
available to HUD grantees or other responsible entities when they 
perform the environmental review. Other changes clarify, streamline, 
and update HUD's regulations.
    This final rule is part of HUD's commitment under HUD's Climate 
Action Plan. Building to the standards discussed in this final rule 
will increase resiliency, reduce the risk of flood loss, minimize the 
impact of floods on human safety, health, and welfare, and promote 
sound, sustainable, long-term planning informed by a more accurate 
evaluation of risk that considers possible sea level rise and increased 
development associated with population growth.

Regulatory Impact Analysis

    Elevating HUD-assisted structures located in and around the FFRMS 
floodplain will lessen damage caused by flooding and avoid relocation 
costs to tenants associated with temporary moves when HUD-assisted 
structures sustain flood damage and are temporarily uninhabitable. 
These benefits, which are realized throughout the life of HUD-assisted 
structures, are offset by the one-time increase in construction costs, 
borne only at the time of construction.
    In addition, the likelihood that floods in coastal areas will 
become more frequent and damaging due to rising sea levels in future 
decades necessitates a stricter standard than the one currently in 
place. Sea level along the contiguous U.S. coastline is expected to 
rise, on average, 10 to 12 inches (0.25 to 0.30 meters) over the next 
30 years (2020 to 2050).\45\ The Intergovernmental Panel on Climate 
Change (2019) also confirms that the sea level rise will continue 
throughout the 21st century.\46\
---------------------------------------------------------------------------

    \45\ 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.
    \46\ IPCC, 2019: Summary for Policymakers. In: IPCC Special 
Report on the Ocean and Cryosphere in a Changing Climate [H.-O. 
Po[ouml]rtner, DC Roberts, V. Masson-Delmotte, P. Zhai, M. Tignor, 
E. Poloczanska, K. Mintenbeck, A. Alegr[iacute]a, M. Nicolai, A. 
Okem, J. Petzold, B. Rama, N.M. Weyer (eds.)]. In press.
---------------------------------------------------------------------------

    As discussed in the regulatory impact analysis (RIA) that 
accompanies this rule, HUD estimates that requiring developers to 
construct or floodproof HUD-funded or insured properties to two feet 
above base flood elevation for FHA-insured single family homes subject 
to part 200 and at or above the FFRMS floodplain for single and multi-
family properties subject to part 55 will increase construction costs 
by $4.492 million to $85.036 million per annual cohort. These are one-
time costs which occur at the time of construction. Benefits of the 
increased standard include avoided damage to buildings, as measured by 
decreased insurance premiums, and avoided costs associated with 
homeowners and tenants being displaced. These benefits occur annually 
over the life of the structures. Over a 40-year period, HUD estimates 
the net present value of aggregate benefits will total $56.4 million to 
$324.3 million for each annual cohort of new construction.
    These estimates are based on the annual production and 
rehabilitation of HUD-assisted and insured structures in the floodplain 
and accounts for the 40 States (in addition to the District of Columbia 
and Puerto Rico) with existing freeboard requirements. The cost of 
compliance and expected benefits are lower in these States than in 
States that have no minimum elevation requirements above base flood 
elevation. HUD's analysis does not consider benefits due to further 
coastal sea level or riverine rise. Further increases in sea level rise 
or inland and riverine flooding would increase the benefits of this 
rule. For a complete description of HUD's analysis, please see the 
accompanying RIA for this rule on regulations.gov.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule would not have 
a significant economic impact on a substantial number of small 
entities.
    With respect to all entities, including small entities, it is 
unlikely that the economic impact would be significant. As the RIA 
explains, the benefits of reduced damage offset the construction costs. 
Further, small entities may benefit more since they are less likely to 
be able to endure financial hardships caused by severe flooding.
    Based on an engineering study conducted for FEMA,\47\ the 
construction cost of increasing the elevation of the base of a new 
residential structure two additional feet of vertical elevation varies 
from 0.3 percent to 4.8 percent of the base building cost. This results 
in an increase in the construction cost of a new house of up to $7,834 
per single family home and $4,772 per unit of

[[Page 30903]]

multifamily new construction for a multifamily property located in 
States with no existing freeboard requirements. Consequently, this 
would not pose a significant burden to small entities in the single 
family housing development industry.
---------------------------------------------------------------------------

    \47\ See Federal Emergency Management Agency, 2008 Supplement to 
the 2006 Evaluation of the National Flood Insurance Program's 
Building Standards (2013).
---------------------------------------------------------------------------

    These costs are likely higher than would be caused by the increased 
standards in this final rule because most HUD-assisted substantial 
improvement projects already involve elevation to comply with the 
current standard, elevation to the base flood elevation (base flood 
elevation +0). Thus, elevating a structure an additional two feet would 
be marginal compared to the initial cost of elevation to the floodplain 
level.
    For these reasons, the undersigned certifies that this rule would 
not have a significant economic impact on a substantial number of small 
entities.

Environmental Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available through the Federal eRulemaking Portal at regulations.gov. 
The FONSI is also available for public inspection during regular 
business hours in the Regulations Division, Office of General Counsel, 
Room 10276, Department of Housing and Urban Development, 451 Seventh 
Street SW, Washington, DC 20410-0500. Due to security measures at the 
HUD Headquarters building, you must schedule an appointment in advance 
to review the FONSI by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number). 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.

Executive Order 13132, Federalism

    E.O. 13132 (entitled ``Federalism'') prohibits an agency from 
publishing any rule that has federalism implications if the rule 
either: (1) imposes substantial direct compliance costs on State and 
local governments and is not required by statute, or (2) preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Order. This rule does not have federalism 
implications and would not impose substantial direct compliance costs 
on State and local governments nor preempts State law within the 
meaning of the Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for Federal agencies to 
assess the effects of their regulatory actions on State, local, and 
Tribal governments, and on the private sector. This rule does not 
impose any Federal mandates on any State, local, or Tribal governments, 
or on the private sector, within the meaning of UMRA.

Paperwork Reduction Act

    The information collection requirements contained in this rule were 
reviewed by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520) and assigned OMB Control Number 2506-0151. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information, unless the collection displays a valid 
control number.

List of Subjects

24 CFR Part 50

    Environmental impact statements.

24 CFR Part 55

    Environmental impact statements, Floodplains, Wetlands.

24 CFR Part 58

    Community development block grants, Environmental impact 
statements, Grant programs--housing and community development, 
Reporting and recordkeeping requirements.

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Lead poisoning, Loan 
programs--housing and community development, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social Security, Unemployment 
compensation, Wages.

    For the reasons stated in this preamble, HUD amends 24 CFR parts 
50, 55, 58, and 200 as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

0
1. The authority citation for part 50 is revised to read as follows:

    Authority: 42 U.S.C. 3535(d) and 4321-4336e; and Executive Order 
11991, 3 CFR, 1977 Comp., p.123.


Sec.  50.4  [Amended]

0
2. Amend Sec.  50.4 in paragraph (b)(2) by removing ``(3 CFR, 1977 
Comp., p. 117)'' and adding in its place ``as amended by Executive 
Order 13690, February 4, 2015 (3 CFR, 2016 Comp., p. 268)''.

0
3. Amend Sec.  50.20 by revising paragraph (a)(2)(i) to read as 
follows:


Sec.  50.20  Categorical exclusions subject to the Federal laws and 
authorities cited in Sec.  50.4.

    (a) * * *
    (2) * * *
    (i) In the case of a building for residential use (with one to four 
units), the density is not increased beyond four units and the land use 
is not changed;
* * * * *

0
4. Amend Sec.  50.23 by revising paragraph (c) to read as follows:


Sec.  50.23  Public participation.

* * * * *
    (c) All required notices shall be published in an appropriate local 
printed news medium or on an appropriate government website that is 
accessible to individuals with disabilities and provides meaningful 
access for individuals with Limited English Proficiency. The required 
notices shall be sent to individuals and groups known to be interested 
in the proposed action.
* * * * *

PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS

0
5. The authority citation for part 55 is revised to read as follows:

    Authority: 42 U.S.C. 3535(d), 4001-4128, and 5154a; 42 U.S.C. 
4321 et seq.; E.O. 13690, 80 FR 6425; Pub. L. 93-234, 87 Stat. 975; 
E.O. 11988, 42 FR 26951, 3 CFR, 1977 Comp., p. 117; E.O. 11990, 42 
FR 26961, 3 CFR, 1977 Comp., p 121.

0
6. Amend Sec.  55.1 by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), adding the text ``as amended,'' after 
``Floodplain Management,'';
0
c. Revising paragraph (a)(3);
0
d. Removing paragraphs (a)(4) and (5);
0
e. Removing and reserving paragraph (b); and
0
f. Removing paragraph (c).
    The revisions read as follows:


Sec.  55.1  Purpose.

    (a) * * *
    (3) This part implements requirements consistent with Executive

[[Page 30904]]

Order 11988, Floodplain Management, as amended, and Executive Order 
11990, Protection of Wetlands, and employs the principles of the 
Unified National Program for Floodplain Management. These regulations 
apply to all proposed actions for which approval is required, either 
from HUD (under any applicable HUD program) or from a recipient (under 
programs subject to 24 CFR part 58), that are subject to potential harm 
by location in floodplains or wetlands. Covered actions include 
acquisition, construction, demolition, improvement, disposition, 
financing, and use of properties located in floodplains or wetlands.
* * * * *

0
7. Revise and republish Sec.  55.2 to read as follows:


Sec.  55.2  Terminology.

    (a) With the exception of those terms defined in paragraph (b) of 
this section, the terms used in this part shall follow the definitions 
contained in section 6 of Executive Order 11988, section 7 of Executive 
Order 11990, and the ``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 terms ``special 
flood hazard area,'' ``criteria,'' and ``Regular Program'' shall follow 
the definitions contained in FEMA regulations at 44 CFR 59.1; and the 
terms ``Letter of Map Revision'' and ``Letter of Map Amendment'' shall 
refer to letters issued by FEMA, as provided in 44 CFR part 65 and 44 
CFR part 70, respectively.
    (b) For purposes of this part, the following definitions apply:
    (1) Coastal high hazard area means the area subject to high 
velocity waters, including but not limited to hurricane wave wash or 
tsunamis. The area is designated on a Flood Insurance Rate Map (FIRM) 
or Flood Insurance Study (FIS) under FEMA regulations, or according to 
best available information. (See Sec.  55.8(b) for appropriate data 
sources.)
    (2) Compensatory mitigation means the restoration (reestablishment 
or rehabilitation), establishment (creation), enhancement, and/or, in 
certain circumstances, preservation of aquatic resources for the 
purposes of offsetting unavoidable adverse impacts that remain after 
all appropriate and practicable avoidance and minimization have been 
achieved. Examples include, but are not limited to:
    (i) Permittee-responsible mitigation: On-site or off-site 
mitigation undertaken by the holder of a wetlands permit under section 
404 of the Clean Water Act (or an authorized agent or contractor), for 
which the permittee retains full responsibility;
    (ii) Mitigation banking: A permittee's purchase of credits from a 
wetlands mitigation bank, comprising wetlands that have been set aside 
to compensate for conversions of other wetlands; the mitigation 
obligation is transferred to the sponsor of the mitigation bank; and
    (iii) In-lieu fee mitigation: A permittee's provision of funds to 
an in-lieu fee sponsor (public agency or nonprofit organization) that 
builds and maintains a mitigation site, often after the permitted 
adverse wetland impacts have occurred; the mitigation obligation is 
transferred to the in-lieu fee sponsor.
    (3)(i) Critical action means any activity for which even a slight 
chance of flooding would be too great, because such flooding might 
result in loss of life, injury to persons, or damage to property. 
Critical actions include activities that create, maintain or extend the 
useful life of those structures or facilities that:
    (A) Produce, use or store highly volatile, flammable, explosive, 
toxic or water-reactive materials;
    (B) Provide essential and irreplaceable records or utility or 
emergency services that may become lost or inoperative during flood and 
storm events (e.g., community stormwater management infrastructure, 
water treatment plants, data storage centers, generating plants, 
principal utility lines, emergency operations centers including fire 
and police stations, and roadways providing sole egress from flood-
prone areas); or
    (C) Are likely to contain occupants who may not be sufficiently 
mobile to avoid loss of life or injury during flood or storm events, 
e.g., persons who reside in hospitals, nursing homes, convalescent 
homes, intermediate care facilities, board and care facilities, and 
retirement service centers. Housing for independent living for the 
elderly is not considered a critical action.
    (ii) Critical actions shall not be approved in floodways, LiMWAs, 
or coastal high hazard areas unless they meet an exception at Sec.  
55.8 or Sec.  55.21.
    (4) Federal Flood Risk Management Standard (FFRMS) floodplain means 
the floodplain as defined by Executive Order 13690 and the 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 and further described as applied to HUD-assisted 
activities by Sec.  55.7 of this part.
    (5) 0.2-percent-annual-chance (500-year) floodplain means the area, 
including the base flood elevation, subject to inundation from a flood 
having a 0.2 percent chance or greater of being equaled or exceeded in 
any given year. (See Sec.  55.8(b) for appropriate data sources).
    (6) Floodway means that portion of the floodplain which is 
effective in carrying flow, where the flood hazard is generally the 
greatest, and where water depths and velocities are the highest. The 
term ``floodway'' as used here is consistent with ``regulatory 
floodways'' as identified by FEMA. (See Sec.  55.8(b) for appropriate 
data sources.)
    (7) Functionally dependent use means a land use that must 
necessarily be conducted in close proximity to water (e.g., a dam, 
marina, port facility, water-front park, and many types of bridges).
    (8) High hazard area means a floodway or a coastal high hazard 
area.
    (9) Impervious surface area means an improved surface that 
measurably reduces the rate of water infiltration below the rate that 
would otherwise be provided by the soil present in a location prior to 
improvement, based on the soil type identified either by the Natural 
Resource Conservation Service Soil Survey or geotechnical study. 
Impervious surfaces include, but are not limited to, unperforated 
concrete or asphalt ground cover, unvegetated roofing materials, and 
other similar treatments that impede infiltration.
    (10) Limit of Moderate Wave Action (LiMWA) means 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. (See Sec.  55.8(b) for appropriate data 
sources.)
    (11) 1-percent-annual-chance (100-year) floodplain means the area 
subject to inundation from a flood having a one percent or greater 
chance of being equaled or exceeded in any given year. (See Sec.  
55.8(b) for appropriate data sources.)
    (12) Substantial improvement--(i) Substantial improvement means 
either:
    (A) Any repair, reconstruction, modernization, or improvement of a 
structure, including a manufactured housing unit, the cost of which 
equals or exceeds 50 percent of the market value of the structure 
either:
    (1) Before the improvement or repair is started; or
    (2) If the structure has been damaged, and is being restored, 
before the damage occurred; or
    (B) Any repair, reconstruction, modernization, or improvement of a 
structure, including a manufactured

[[Page 30905]]

housing unit, that results in an increase of more than twenty percent 
in the number of dwelling units in a residential project or in the 
average peak number of customers and employees likely to be on-site at 
any one time for a commercial or industrial project.
    (ii) Substantial improvement may not be defined to include either:
    (A) Any project for improvement of a structure to comply with 
existing state or local health, sanitary or safety code specifications 
that is solely necessary to assure safe living conditions, or
    (B) Any alteration of a structure listed on the National Register 
of Historical Places or on a State Inventory of Historic Places.
    (iii) Structural repairs, reconstruction, or improvements not 
meeting this definition are considered ``minor improvements''.
    (13) Wetlands means those areas that are inundated or saturated by 
surface or ground water with a frequency sufficient to support, and 
under normal circumstances does or would support, a prevalence of 
vegetative or aquatic life that requires saturated or seasonally 
saturated soil conditions for growth and reproduction. Wetlands 
generally include swamps, marshes, bogs, and similar areas such as 
sloughs, prairie potholes, wet meadows, river overflows, mud flats, and 
natural ponds. This definition includes those wetland areas separated 
from their natural supply of water as a result of activities such as 
the construction of structural flood protection methods or solid fill 
roadbeds and activities such as mineral extraction and navigation 
improvements. This definition includes both wetlands subject to and 
those not subject to Section 404 of the Clean Water Act as well as 
constructed wetlands.

0
8. Amend Sec.  55.3 by:
0
a. Redesignating paragraphs (a) through (d) as paragraphs (b) through 
(e), respectively;
0
b. Add a new paragraph (a);
0
c. Revising newly redesignated paragraph (c)(1);
0
d. Removing the word ``technical'' from newly redesignated paragraph 
(c)(3);
0
e. Revising newly redesignated paragraphs (c)(4), (d), and (e); and
0
f. Adding paragraph (f).
    The revisions and additions read as follows:


Sec.  55.3  Assignment of responsibilities.

    (a) General. The implementation of Executive Orders 11988 and 11990 
under this part shall be conducted by HUD for Department-administered 
programs subject to environmental review under 24 CFR part 50 and by 
authorized responsible entities that are responsible for environmental 
review under 24 CFR part 58.
* * * * *
    (c) * * *
    (1) Ensure compliance with this part for all actions under their 
jurisdiction that are proposed to be conducted, supported, or permitted 
in a floodplain or wetland, including taking full responsibility for 
all decisions made under their jurisdiction that are made pursuant to 
Sec.  55.20 for environmental reviews completed pursuant to 24 CFR part 
50;
* * * * *
    (4) Incorporate in departmental regulations, handbooks, and project 
and site standards those criteria, standards, and procedures related to 
compliance with this part.
    (d) Responsible entity Certifying Officer. Certifying Officers of 
responsible entities administering or reviewing activities subject to 
24 CFR part 58 shall comply with this part in carrying out HUD-assisted 
programs. Certifying Officers shall monitor approved actions and ensure 
that any prescribed mitigation is implemented.
    (e) Grantees and applicants. Grantees and Applicants that are not 
acting as responsible entities shall:
    (1) Supply HUD (or the responsible entity authorized by 24 CFR part 
58) with all available, relevant information necessary for HUD (or the 
responsible entity) to perform the compliance required by this part, 
including environmental review record documentation described in 24 CFR 
58.38, as applicable;
    (2) Implement mitigating measures required by HUD (or the 
responsible entity authorized by 24 CFR part 58) under this part or 
select alternate eligible property; and
    (3) Monitor approved actions and ensure that any prescribed 
mitigation is implemented.
    (f) Third party providers. Consultants and other parties to the 
environmental review process may prepare maps, studies (e.g., hydraulic 
and hydrologic studies), and reports to support compliance with this 
part, including identification of floodplains and wetlands and 
development of alternatives or minimization measures. The following 
responsibilities, however, may not be delegated to the third-party 
provider:
    (1) Receipt of public or agency comments;
    (2) Selection or rejection of alternatives analyzed in Step 3 of 
the 8-step decision making process in Sec.  55.20;
    (3) Selection or rejection of minimization measures analyzed in 
Step 5 of the 8-step decision making process in Sec.  55.20;
    (4) Determination whether avoidance of floodplain or wetland 
impacts, according to the purpose of Executive Orders 11988 and 11990, 
is or is not practicable.

0
9. Add Sec. Sec.  55.4 through 55.6 to subpart A to read as follows:
Sec.
* * * * *
55.4 Notification of floodplain hazard.
55.5 Flood insurance.
55.6 Complying with this part.


Sec.  55.4  Notification of floodplain hazard.

    (a) Notification for property owners, buyers, and developers. For 
actions in the FFRMS floodplain (as defined in Sec.  55.7), HUD (or 
HUD's designee) or the responsible entity must ensure that any party 
participating in the transaction is notified that the property is in 
the FFRMS floodplain and whether flood insurance is required or 
available in this location. Notification shall also include a 
description of the approximate elevation of the FFRMS floodplain, 
proximity to flood-related infrastructure impacting the site including 
dams and levees, the location of ingress and egress or evacuation 
routes relative to the FFRMS floodplain, disclosure of information on 
flood insurance claims filed on the property to the extent available 
from FEMA, and other relevant information such as available emergency 
notification resources.
    (b) Renter notification. For HUD-assisted, HUD-acquired, and HUD-
insured rental properties within the FFRMS floodplain, new and renewal 
leases must 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. Notification 
shall also include the location of ingress and egress routes relative 
to the FFRMS floodplain, available emergency notification resources, 
and the property's emergency procedures for residents in the event of 
flooding.
    (c) Conveyance restrictions for the disposition of multifamily real 
property. (1) In the disposition (including leasing) of multifamily 
properties acquired by HUD that are located in the FFRMS floodplain, 
the documents used for the conveyance must:
    (i) Refer to those uses that are restricted under identified 
Federal, State, or local floodplain regulations; and
    (ii) Include any land use restrictions limiting the use of the 
property by a

[[Page 30906]]

grantee or purchaser and any successors under State or local laws.
    (2)(i) For disposition of multifamily properties acquired by HUD 
that are located in the FFRMS floodplain and contain critical actions, 
HUD shall, as a condition of approval of the disposition, require by 
covenant or comparable restriction on the property's use that the 
property owner and successive owners provide written notification to 
each current and prospective tenant concerning:
    (A) The hazards to life and to property for those persons who 
reside or work in a structure located within the FFRMS floodplain, and
    (B) The availability of flood insurance on the contents of their 
dwelling unit or business.
    (ii) The notice described in paragraph (c)(2)(i) of this section 
shall also be posted in the building so that it will be legible at all 
times and easily visible to all persons entering or using the building.


Sec.  55.5  Flood insurance.

    (a)(1) As required by section 102(a) of the Flood Disaster 
Protection Act of 1973, as amended (42 U.S.C. 4012a), when HUD 
financial assistance (including mortgage insurance) is proposed for 
acquisition or construction purposes in any special flood hazard area 
(as designated by the Federal Emergency Management Agency (FEMA) on an 
effective Flood Insurance Rate Map (FIRM) or Flood Insurance Study 
(FIS)), structures for which HUD financial assistance is provided must 
be covered by flood insurance in an amount at least equal to the 
project cost less estimated land cost, the outstanding principal 
balance of any HUD-assisted or HUD-insured loan, or the maximum limit 
of coverage available under the National Flood Insurance Program, 
whichever is least. Under section 202(a) of the Flood Disaster 
Protection Act of 1973, 42 U.S.C. 4106(a), such proposed assistance in 
any special flood hazard area shall not be approved in communities 
identified by FEMA as eligible for flood insurance but which are not 
participating in the National Flood Insurance Program. This prohibition 
only applies to proposed HUD financial assistance in a FEMA-designated 
special flood hazard area one year after the community has been 
formally notified by FEMA of the designation of the affected area. This 
requirement is not applicable to HUD financial assistance in the form 
of formula grants to States, including financial assistance under the 
State-administered CDBG Program (24 CFR part 570, subpart I), Emergency 
Solutions Grant amounts allocated to States (24 CFR part 576), and HOME 
funds provided to a State under Title II of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 12701-12839). HUD strongly 
encourages that flood insurance be obtained and maintained for all HUD-
assisted structures in the FFRMS floodplain, sites that have previously 
flooded, or sites in close proximity to a floodplain.
    (2) Under section 582 of the National Flood Insurance Reform Act of 
1994 (42 U.S.C. 5154a), HUD disaster assistance that is made available 
in a special flood hazard area may not be used to make a payment 
(including any loan assistance payment) to a person for repair, 
replacement, or restoration of damage to any personal, residential, or 
commercial property if:
    (i) The person had previously received Federal flood disaster 
assistance conditioned on obtaining and maintaining flood insurance; 
and
    (ii) The person failed to obtain and maintain the flood insurance.
    (b) HUD or the responsible entity may impose flood insurance 
requirements that exceed the minimums established by the Flood Disaster 
Protection Act of 1973 or by Tribal, State, or local requirements when 
needed to minimize financial risk from flood hazards. HUD and 
responsible entities have discretion to require that flood insurance be 
maintained for structures outside of the FEMA-mapped floodplain but 
within the FFRMS floodplain and/or that structures be insured up to the 
full replacement cost of the structure when needed to minimize 
financial risk from flood hazards. Nothing in this part limits 
additional flood insurance requirements that may be imposed by a 
mortgagee participating in a HUD assistance or mortgage insurance or 
guarantee program.


Sec.  55.6  Complying with this part.

    (a) Process. The process to comply with this part is as follows:
    (1) HUD or the responsible entity shall determine whether 
compliance with this part is required. Refer to Sec.  55.12 for a list 
of activities that do not require further compliance with this part 
beyond the provisions of paragraph (c) of this section.
    (2) HUD or the responsible entity shall refer to Sec.  55.8 to 
determine whether the proposed action is eligible for HUD assistance or 
if it must be rejected as proposed.
    (3) If the project requires compliance under this part and is not 
prohibited by Sec.  55.8, HUD or the responsible entity shall refer to 
Sec.  55.13 to determine whether the 8-step decision making process in 
Sec.  55.20 is required.
    (4) HUD or the responsible entity shall refer to Sec.  55.10 to 
determine whether the 8-step decision making process in Sec.  55.20 for 
wetland protection is required or whether best practices to minimize 
potential indirect impacts to wetlands should be pursued.
    (5) HUD or the responsible entity shall determine whether an 
exception in Sec.  55.14 applies that would allow them to complete an 
abbreviated decision-making process under Sec.  55.20.
    (6) Where the decision-making process is required, HUD or the 
responsible entity shall follow the decision-making process described 
in Sec.  55.20, eliminating any steps as permitted under Sec.  55.14.
    (b) Decision making. HUD or the responsible entity shall determine 
whether to approve the action as proposed, approve the action with 
modifications or at an alternative site, or reject the proposed action, 
based on its analysis of the proposed risks and impacts. HUD or the 
responsible entity has discretion to reject any project where it 
determines that the level of flood hazard is incompatible with the 
proposed use of the site or that the extent of impacts to wetlands or 
to the beneficial function of floodplains is not acceptable, regardless 
of whether it would otherwise be acceptable under this part.
    (c) Other requirements. Refer to Sec. Sec.  55.4 and 55.5 to 
determine whether the proposed action may require notifications and/or 
flood insurance. Actions that do not require full compliance under this 
part may still trigger notification and flood insurance requirements.
    (d) Documentation. HUD or the responsible entity shall require that 
all of the analysis required under this part, including applicable 
exceptions and all required steps described in Sec.  55.20, be 
documented in the environmental review record.

Subpart B--Application of Executive Orders on Floodplain Management 
and Protection of Wetlands

0
10. Add Sec. Sec.  55.7 through 55.9 to read as follows:
Sec.
* * * * *
55.7 Identifying the FFRMS floodplain.
55.8 Limitations on HUD assistance in floodplains.
55.9 Identifying wetlands.
* * * * *


Sec.  55.7  Identifying the FFRMS floodplain.

    (a) HUD or the responsible entity shall determine all compliance 
with the

[[Page 30907]]

floodplain review requirements of this part based on the FFRMS 
floodplain.
    (b) For a non-critical action, HUD or the responsible entity shall 
define the FFRMS floodplain using the following process:
    (1) The climate-informed science approach (CISA) to identify the 
area having an elevated flood risk during the anticipated life of the 
project if data is available and actionable. Data is available and 
actionable for a particular project where:
    (i) The data can be accessed via a tool, resource, or other process 
developed or identified by a Federal agency or agencies to define the 
floodplain using the CISA, and
    (ii) HUD has adopted the particular tool, resource, or other 
process through a Federal Register publication for comment.
    (2) If CISA data is not available or actionable but FEMA has 
defined the 0.2-percent-annual-chance floodplain, those areas that FEMA 
has designated as within the 0.2-percent-annual-chance floodplain; or
    (3) If neither CISA data nor FEMA-mapped 0.2-percent-annual-chance 
floodplain data is available, those areas that result from adding an 
additional two feet to the base flood elevation as established by the 
effective FIRM or FIS or--if available--FEMA-provided interim or 
preliminary maps or studies or advisory base flood elevations.
    (4) FFRMS floodplain determinations under paragraphs (b)(2) and (3) 
of this section shall be made using the information provided in the 
latest FEMA resources. Elevation determinations based on CISA data or 
an interim or preliminary FEMA map cannot be used as a basis for a 
lower elevation than the base flood elevation on the current FIRM or 
FIS.
    (c) For a critical action, the FFRMS floodplain is either:
    (1) Those areas designated as having an elevated flood risk 
identified by the climate-informed science approach (CISA)--as 
determined based on the criticality of the action--during the 
anticipated life of the project if the data is available and 
actionable, as available and actionable is described in paragraph 
(b)(1) of this section; or
    (2) If CISA data as described above is not available or actionable, 
an area either within the 0.2-percent-annual-chance floodplain or 
within the area that results from adding an additional three feet to 
the base flood elevation. The larger floodplain and higher elevation 
must be applied where the 0.2-percent-annual-chance floodplain is 
mapped. If FEMA resources do not map the 0.2-percent-annual-chance 
floodplain, the FFRMS floodplain is the area that results from adding 
an additional three feet to the base flood elevation based on best 
available information.
    (3) FFRMS floodplain determinations under paragraph (c)(2) of this 
section shall be made using the information provided in the latest FEMA 
resources.
    (d) If CISA data is not available or actionable and if FEMA FIRMS, 
FIS, preliminary maps or advisory base flood elevations are unavailable 
or insufficiently detailed to determine base flood elevation, other 
Federal, Tribal, State, or local data shall be used as ``best available 
information.'' If best available information is based only on past 
flooding and does not consider future flood risk:
    (1) For non-critical actions, the FFRMS floodplain includes those 
areas that result from adding an additional two feet to the base flood 
elevation based on best available information.
    (2) For critical actions, the FFRMS floodplain includes those areas 
that result from adding an additional three feet to the base flood 
elevation based on best available information.
    (e) When preparing an Environmental Impact Statement (EIS), an 
analysis of the best available, actionable climate science, where 
available and actionable data exists or can be generated in accordance 
with 42 U.S.C. 4336(b)(3), as determined by HUD or the responsible 
entity, must be performed to define the FFRMS floodplain. These sources 
may supplement the FIRM or Advisory Base Flood Elevation (ABFE) in 
order to better minimize impacts to projects or to elevate or 
floodproof structures above the risk adjusted floodplain. These sources 
may not be used as a basis for a lower elevation than otherwise 
required under this section.
    (f)(1) Regardless of whether HUD has adopted a particular tool, 
resource, or other process to define the floodplain using CISA, as 
described in paragraphs (b)(1) and (c)(1) of this section, HUD or a 
responsible entity may voluntarily define the FFRMS floodplain 
utilizing CISA when:
    (i) A State, Tribal, or local government formally adopts, through 
code or other formal adoption measures, a tool, resource, or other 
written standard developed or utilized by the State, Tribal, or local 
government that provides data or other methods to identify the FFRMS 
floodplain using CISA for a particular project; or
    (ii) HUD publishes guidance identifying a particular tool, 
resource, or other process that may be used to define the floodplain 
using CISA, and the tool, resource, or other process identified in the 
HUD-published guidance contains the necessary data or information to 
define the floodplain for the project being considered.
    (2)(i) The approach in this paragraph (f) may not be used as a 
basis for a lower elevation than the lowest of:
    (A) The 0.2-percent-annual-chance floodplain elevation;
    (B) The elevation that results from adding an additional two feet 
to the base flood elevation; or
    (C) The elevation required by paragraph (b) or (c) of this section, 
if CISA data is available and actionable under paragraph (b)(1) or 
(c)(1).
    (ii) Where HUD or a responsible entity voluntarily defines the 
FFRMS floodplain using the options in paragraph (f)(1)(i) or (ii) of 
this section, the criticality of the action must be considered when 
determining the appropriate elevation of the FFRMS floodplain.


Sec.  55.8  Limitations on HUD assistance in floodplains.

    (a) HUD financial assistance (including mortgage insurance) may not 
be approved with respect to:
    (1) Any action located in a floodway unless one of the following 
applies:
    (i) An exception listed in Sec.  55.12 applies; or
    (ii) A permanent covenant or comparable restriction will preserve 
all onsite FFRMS floodplain and/or wetland areas from future 
development or expansion of existing uses in the floodplain and/or 
wetland areas. Any rehabilitation, including reconstruction in the case 
of properties affected by Presidentially declared disasters, that does 
not expand the footprint of the buildings or the number of units on the 
site would be allowed within the FFRMS floodplain outside of the 
floodway. No buildings or improvements may modify or occupy the 
floodway, with the exception of:
    (A) Functionally dependent uses (as defined in Sec.  55.2(b)(7)) 
and utility lines;
    (B) De minimis improvements, including minimal ground disturbance 
or placement of impervious surface area to ensure accessibility where 
this is permitted by local ordinances and does not increase flood risk 
to the property; or
    (C) Buildings and improvements that will be removed as part of the 
proposed action.
    (2) Any critical action located in a floodway, other than a 
functionally dependent use where any existing or new structure has been 
or will be elevated or floodproofed to the FFRMS elevation for critical 
actions; or any critical action in a coastal high hazard

[[Page 30908]]

area or LiMWA, other than a functionally dependent use where any 
existing or new structure has been or will be elevated and constructed 
in accordance with current FEMA V-zone construction standards at 44 CFR 
60.3(e); provided that, for a critical action that is insurance of a 
mortgage on a property containing a floodway with no structures or 
improvements in the floodway, paragraph (a)(1) of this section applies; 
or
    (3) Any noncritical action located in a coastal high hazard area, 
or LiMWA, unless the action is a functionally dependent use, is limited 
to existing structures or improvements, or is reconstruction following 
destruction caused by a Presidentially declared disaster. If the action 
is not a functionally dependent use, the action must be designed for 
location in a coastal high hazard area. An action will be considered 
designed for a coastal high hazard area if:
    (i) In the case of reconstruction following destruction caused by a 
disaster, or substantial improvement, the work meets the current 
standards for V zones in FEMA regulations (44 CFR 60.3(e)) and, if 
applicable, the Minimum Property Standards for such construction in 24 
CFR 200.926d(c)(4)(iii); or
    (ii) In the case of existing construction (including any minor 
improvements that are not substantial improvements):
    (A) The work met FEMA elevation and construction standards for a 
coastal high hazard area (or if such a zone or such standards were not 
designated, the 1-percent-annual-chance floodplain) applicable at the 
time the original improvements were constructed; or
    (B) If the original improvements were constructed before FEMA 
standards for the 1-percent-annual-chance floodplain became effective 
or before FEMA designated the location of the action as within the 1-
percent-annual-chance floodplain, the work would meet at least the 
earliest FEMA standards for construction in the 1-percent-annual-chance 
floodplain.
    (b) All determinations made pursuant to this section shall be based 
on the effective FIRM or FIS unless FEMA has provided more current 
information. When FEMA provides interim flood hazard data, such as ABFE 
or preliminary maps and studies, HUD or the responsible entity shall 
use the latest of these sources. However, a base flood elevation from 
an interim or preliminary source cannot be used if it is lower than the 
base flood elevation on the current FIRM and FIS.
    (c) Where HUD assistance is proposed for actions subject to Sec.  
55.20 on structures designated by FEMA as Severe Repetitive Loss (SRL) 
properties, and FEMA has approved measures that if implemented would 
qualify the property for a status of ``Mitigated'' as to the SRL list, 
HUD or the responsible entity will ensure that FEMA-identified 
mitigation measures are identified and implemented as part of the 
decision making process under Sec.  55.20(e).


Sec.  55.9  Identifying wetlands.

    The following process shall be followed in making the wetlands 
determination:
    (a) HUD or the responsible entity shall determine whether the 
action involves new construction that is located in or impacts a 
wetland.
    (b) As primary screening, HUD or the responsible entity shall 
verify whether the project area is located in proximity to wetlands 
identified on the National Wetlands Inventory (NWI) and assess the site 
for visual indication of the presence of wetlands such as hydrology 
(water), hydric soils, or wetland vegetation. Where the primary 
screening is inconclusive, potential wetlands should be further 
evaluated using one or more of the following methods:
    (1) Consultation with the Department of the Interior, U.S. Fish and 
Wildlife Service (USFWS), for information concerning the location, 
boundaries, scale, and classification of wetlands within the area.
    (2) Reference to the Department of Agriculture, Natural Resources 
Conservation Service (NRCS) National Soil Survey (NSS), and any Tribal, 
State, or local information concerning the location, boundaries, scale, 
and classification of wetlands within the action area and further site 
study by the environmental review preparer with reference to Federal 
guidance on field identification of the biological (rather than 
jurisdictional) characteristics of wetlands.
    (3) Evaluation by a qualified wetlands scientist to delineate the 
wetland boundaries on site.

0
11. Revise Sec.  55.10 to read as follows:


Sec.  55.10  Limitations on HUD assistance in wetlands.

    (a) When the proposed project includes new construction activities 
(including grading, clearing, draining, filling, diking, impounding, 
and related activities for any structure or facilities including the 
siting of new manufactured housing units) that will have a direct 
impact to onsite wetlands identified by the process described in Sec.  
55.9, compliance with this part requires completion of the 8-step 
decision making process in Sec.  55.20 to address wetland impacts.
    (b) When the proposed project may indirectly affect wetlands by 
modifying the flow of stormwater, releasing pollutants, or otherwise 
changing conditions that contribute to wetlands viability, the 
significance of these impacts must be evaluated and the impacts 
minimized through best management practices. If the project site 
includes wetlands that will not be impacted by new construction, HUD 
strongly encourages measures to preserve such wetlands from future 
impacts, including by obtaining a restrictive covenant, conservation 
easement, or other mechanism.
    (c) When the proposed project may indirectly affect off-site 
wetlands, impacts should be minimized to the extent practicable. While 
this part does not require further decision making to address these 
effects under the authority of Executive Order 11990, measures to 
address offsite wetlands impacts may be necessary to comply with 
related laws and authorities including the Endangered Species Act or to 
address significant impacts under the National Environmental Policy 
Act.


Sec.  55.11  [Removed and Reserved]

0
12. Remove and reserve Sec.  55.11.

0
13. Revise Sec.  55.12 to read as follows:


Sec.  55.12  Inapplicability of 24 CFR part 55 to certain categories of 
proposed actions.

    With the exception of the flood insurance requirements in Sec.  
55.5, this part shall not apply to the following categories of proposed 
HUD actions:
    (a) HUD-assisted activities described in 24 CFR 58.34 and 58.35(b);
    (b) HUD-assisted activities described in 24 CFR 50.19, except as 
otherwise indicated in Sec.  50.19;
    (c) The approval of financial assistance for restoring and 
preserving the natural and beneficial functions and values of 
floodplains and wetlands, including through acquisition of such 
floodplain and wetland property, where a permanent covenant or 
comparable restriction is placed on the property's continued use for 
flood control, wetland protection, open space, or park land, but only 
if:
    (1) The property is cleared of all existing buildings and walled 
structures; and
    (2) The property is cleared of related improvements except those 
which:
    (i) Are directly related to flood control, wetland protection, open 
space, or park land (including playgrounds and recreation areas);
    (ii) Do not modify existing wetland areas or involve fill, paving, 
or other

[[Page 30909]]

ground disturbance beyond minimal trails or paths; and
    (iii) Are designed to be compatible with the beneficial floodplain 
or wetland function of the property.
    (d) An action involving a repossession, receivership, foreclosure, 
or similar acquisition of property to protect or enforce HUD's 
financial interests under previously approved loans, grants, mortgage 
insurance, or other HUD assistance;
    (e) Policy-level actions described at 24 CFR 50.16 that do not 
involve site-based decisions;
    (f) A minor amendment to a previously approved action with no 
additional adverse impact on or from a floodplain or wetland;
    (g) HUD's or the responsible entity's approval of a project site, 
an incidental portion of which is situated in the FFRMS floodplain (not 
including the floodway, LiMWA, or coastal high hazard area), but only 
if:
    (1) The proposed project site does not include any existing or 
proposed buildings or improvements that modify or occupy the FFRMS 
floodplain except de minimis improvements such as recreation areas and 
trails; and
    (2) The proposed project will not result in any new construction in 
or modifications of a wetland.
    (h) Issuance or use of Housing Vouchers or other forms of rental 
subsidy where HUD, the awarding community, or the public housing agency 
that administers the contract awards rental subsidies that are not 
project-based (i.e., do not involve site-specific subsidies);
    (i) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and persons with disabilities.

0
14. Add Sec. Sec.  55.13 and 55.14 to read as follows:


Sec.  55.13  Inapplicability of 8-step decision making process to 
certain categories of proposed actions.

    The decision-making process in Sec.  55.20 shall not apply to the 
following categories of proposed actions:
    (a) HUD's mortgage insurance actions and other financial assistance 
for the purchasing, mortgaging, or refinancing of existing one- to 
four-family properties in communities that are in the Regular Program 
of the National Flood Insurance Program (NFIP) and in good standing 
(i.e., not suspended from program eligibility or placed on probation 
under 44 CFR 59.24), where the action is not a critical action and the 
property is not located in a floodway, coastal high hazard area, or 
LiMWA;
    (b) Financial assistance for minor repairs or improvements on one- 
to four-family properties that do not meet the thresholds for 
``substantial improvement'' under Sec.  55.2(b)(12);
    (c) HUD or a recipient's actions involving the disposition of 
individual HUD or recipient held one- to four-family properties;
    (d) HUD guarantees under the Loan Guarantee Recovery Fund Program 
(24 CFR part 573), where any new construction or rehabilitation 
financed by the existing loan or mortgage has been completed prior to 
the filing of an application under the program, and the refinancing 
will not allow further construction or rehabilitation, nor result in 
any physical impacts or changes except for routine maintenance;
    (e) The approval of financial assistance to lease an existing 
structure and/or units within an existing structure located within the 
floodplain, but only if;
    (1) The structure is located outside the floodway or coastal high 
hazard area, and is in a community that is in the Regular Program of 
the NFIP and in good standing (i.e., not suspended from program 
eligibility or placed on probation under 44 CFR 59.24);
    (2) The project is not a critical action; and
    (3) The entire structure is or will be fully insured or insured to 
the maximum extent available under the NFIP for at least the term of 
the lease.
    (f) Special projects for the purpose of improving the energy or 
water efficiency of utilities or installing renewable energy that 
involve the repair, rehabilitation, modernization, weatherization, or 
improvement of existing structures or infrastructure, do not meet the 
thresholds for ``substantial improvement'' under Sec.  55.2(b)(12), and 
do not include the installation of equipment below the FFRMS floodplain 
elevation; and


Sec.  55.14  Modified 5-step decision making process for certain 
categories of proposed actions.

    The decision making steps in Sec.  55.20(b), (c), and (g) (Steps 2, 
3, and 7) do not apply to the following categories of proposed actions:
    (a) HUD's or the recipient's actions involving the disposition of 
acquired multifamily housing projects or ``bulk sales'' of HUD-acquired 
(or under part 58 of recipients') one- to four-family properties in 
communities that are in the Regular Program of the NFIP and in good 
standing (i.e., not suspended from program eligibility or placed on 
probation under 44 CFR 59.24). For programs subject to part 58, this 
paragraph applies only to recipients' disposition activities that are 
subject to review under part 58.
    (b) HUD's actions under the National Housing Act (12 U.S.C. 1701 et 
seq.) for the purchase or refinancing of existing multifamily housing 
projects, hospitals, nursing homes, assisted living facilities, board 
and care facilities, and intermediate care facilities, in communities 
that are in good standing under the NFIP.
    (c) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, modernization, weatherization, or 
improvement of existing multifamily housing projects, hospitals, 
nursing homes, assisted living facilities, board and care facilities, 
intermediate care facilities, and one- to four-family properties, in 
communities that are in the Regular Program of the NFIP and are in good 
standing (i.e., not suspended from program eligibility or placed on 
probation under 44 CFR 59.24), provided that the number of units is not 
increased more than 20 percent, the action does not involve a 
conversion from nonresidential to residential land use, the action does 
not meet the thresholds for ``substantial improvement'' under Sec.  
55.2(b)(12), and the footprint of the structure and paved areas is not 
increased by more than 20 percent.
    (d) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, modernization, weatherization, or 
improvement of existing nonresidential buildings and structures, in 
communities that are in the Regular Program of the NFIP and are in good 
standing (i.e., not suspended from program eligibility or placed on 
probation under 44 CFR 59.24), provided that the action does not meet 
the thresholds for ``substantial improvement'' under Sec.  55.2(b)(12) 
and the footprint of the structure and paved areas is not increased by 
more than 20 percent.
    (e) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, or replacement of existing 
nonstructural improvements including streets, curbs, and gutters, where 
any increase of the total impervious surface area of the facility is de 
minimis. This provision does not include critical actions, levee 
systems, chemical storage facilities (including any tanks), wastewater 
facilities, or sewer lagoons.

[[Page 30910]]

Subpart C--Procedures for Making Determinations on Floodplain 
Management and Protection of Wetlands

0
15. Add Sec.  55.16 to read as follows:


Sec.  55.16  Applicability of subpart C decision making process.

    Table 1 to this section indicates the applicability, by location 
and type of action, of the decision making process for implementing 
Executive Order 11988 and Executive Order 11990 under this subpart.

                                             Table 1 to Sec.   55.16
----------------------------------------------------------------------------------------------------------------
                                                                                             Wetlands or FFRMS
    Type of proposed action (new                                                            floodplain outside
 reviewable action or an amendment)         Floodways          Coastal high hazard and      coastal high hazard
                \1\                                                  LiMWA areas           area, LiMWA area, and
                                                                                                 floodways
----------------------------------------------------------------------------------------------------------------
Critical actions as defined in Sec.  Critical actions not    Critical actions not         Allowed if the
   55.2(b)(3).                        allowed unless they     allowed unless they meet     proposed critical
                                      meet the requirements   the requirements for         action is processed
                                      for critical actions    critical actions in Sec.     under Sec.
                                      in Sec.   55.8 and      55.8 and are processed       55.20.\2\
                                      are processed under     under Sec.   55.20 \2\.
                                      Sec.   55.20 \2\.
Noncritical actions not excluded     Allowed only if the     Allowed only if the          Allowed if proposed
 under Sec.   55.12 or Sec.   55.13.  proposed non-critical   proposed noncritical         noncritical action is
                                      action is not           action is processed under    processed under Sec.
                                      prohibited under Sec.   Sec.   55.20 \2\ and is       55.20.\2\
                                        55.8(a)(1) and is     (1) a functionally
                                      processed under Sec.    dependent use, (2)
                                       55.20 \2\.             existing construction
                                                              (including improvements),
                                                              or (3) reconstruction
                                                              following destruction
                                                              caused by a disaster. If
                                                              the action is not a
                                                              functionally dependent
                                                              use, the action must be
                                                              designed for location in a
                                                              coastal high hazard area
                                                              under Sec.   55.8(a)(3).
----------------------------------------------------------------------------------------------------------------
\1\ Under Executive Order 11990, the decision making process in Sec.   55.20 only applies to Federal assistance
  for new construction in wetlands locations.
\2\ Or those paragraphs of Sec.   55.20 that are applicable to an action listed in Sec.   55.14.


0
16. Amend Sec.  55.20 by:
0
a. Revising the introductory text, paragraph (a), paragraph (b) 
introductory text, and paragraphs (b)(1) and (2);
0
b. Removing ``HUD'' from the last sentence and adding in its place 
``HUD's'' in paragraph (b)(3);
0
c. Adding paragraph (b)(4);
0
d. Revising paragraphs (c) introductory text, (c)(1)(i) and (ii), 
(c)(2) introductory text, (c)(2)(iii), (c)(3), (d) introductory text, 
(d)(1), (d)(2) introductory text, (d)(2)(i), (e), (f) introductory 
text, and (f)(2)(ii);
0
e. Adding paragraph (f)(2)(iii); and
0
f. Revising paragraph (g)(1) introductory text.
    The revisions and additions read as follows:


Sec.  55.20  Decision making process.

    Except for actions covered by Sec.  55.14, the decision making 
process for compliance with this part contains eight steps, including 
public notices and an examination of practicable alternatives when 
addressing floodplains and wetlands. Third parties may provide analysis 
and information to support the decision making process; however, final 
determinations for each step, authorization of public notices, and 
receipt of public comments, are the responsibility of HUD or the 
responsible entity. The steps to be followed in the decision making 
process are as follows:
    (a) Step 1. Using the processes described in Sec. Sec.  55.7 and 
55.9, determine whether the proposed action is located in the FFRMS 
floodplain or results in new construction that directly impacts an 
onsite wetland. If the action does not occur in the FFRMS floodplain or 
include new construction directly impacting an onsite wetland, then no 
further compliance with this section is required. Where the proposed 
action would be located in the FFRMS floodplain and includes new 
construction directly impacting an onsite wetland, these impacts should 
be evaluated together in a single 8-step decision making process. In 
such a case, the wetland will be considered among the primary natural 
and beneficial functions and values of the floodplain. For purposes of 
this section, an ``action'' includes areas required for ingress and 
egress, even if they are not within the site boundary, and other 
integral components of the proposed action, even if they are not within 
the site boundary.
    (b) Step 2. Notify the public and agencies responsible for 
floodplain management or wetlands protection at the earliest possible 
time of a proposal to consider an action in an FFRMS floodplain or 
wetland and involve the affected and interested public and agencies in 
the decision making process.
    (1) The public notices required by paragraphs (b) and (g) of this 
section may be combined with other project notices wherever 
appropriate. Notices required under this part must be bilingual or 
multilingual, as appropriate, if the affected public has Limited 
English Proficiency. In addition, all notices must be published in a 
newspaper of general circulation in the affected community or on an 
appropriate government website that is accessible to individuals with 
disabilities and provides meaningful access for individuals with 
Limited English Proficiency, and must be sent to Federal, State, and 
local public agencies, organizations, and, where not otherwise covered, 
individuals known to be interested in the proposed action.
    (2) A minimum of 15 calendar days shall be allowed for comment on 
the public notice. The first day of a time period begins at 12:01 a.m. 
local time on the day following the publication or the mailing and 
posting date of the notice which initiates the time period.
* * * * *
    (4) When the proposed activity is located in or affects a community 
with environmental justice concerns, public comment and decision making 
under this part shall be coordinated with consultation and decision 
making under HUD policies implementing 24 CFR 58.5(j) or 50.4(l).
    (c) Step 3. Identify and evaluate practicable alternatives to 
locating the proposed action in the FFRMS floodplain or wetland.
    (1) * * *
    (i) Locations outside and not affecting the FFRMS floodplain or 
wetland;

[[Page 30911]]

    (ii) Alternative methods to serve the identical project objective, 
including but not limited to design alternatives such as repositioning 
or reconfiguring proposed siting of structures and improvements or 
incorporating natural systems, ecosystem processes, and nature-based 
solutions to avoid floodplain and wetland impacts; and
* * * * *
    (2) Practicability of alternatives should be addressed in light of 
the goals identified in the project description related to the 
following:
* * * * *
    (iii) Economic values such as the cost of space, construction, 
services, relocation, potential property losses from flooding, and cost 
of flood insurance.
    (3) For multifamily and healthcare projects involving HUD mortgage 
insurance that are initiated by third parties, HUD in its consideration 
of practicable alternatives is not required to consider alternative 
sites, but must include consideration of:
    (i) A determination to approve the request without modification;
    (ii) A determination to approve the request with modification; and
    (iii) A determination not to approve the request.
    (d) Step 4. Identify and evaluate the potential direct and indirect 
impacts associated with the occupancy or modification of the FFRMS 
floodplain or the wetland and the potential direct and indirect support 
of floodplain and wetland development that could result from the 
proposed action, including impacts related to future climate-related 
flood levels, sea level rise, and the related increased value of 
beneficial floodplain and wetland functions.
    (1) Floodplain evaluation. The floodplain evaluation for the 
proposed action must evaluate floodplain characteristics (both existing 
and as proposed for modification by the project) to determine potential 
adverse impacts to lives, property, and natural and beneficial 
floodplain values as compared with alternatives identified in Step 3.
    (i) Floodplain characteristics include:
    (A) Identification of portions of the site that are subject to 
flood risk, documented through mapping and, as required by Sec.  
55.7(e) or commensurate with the scale of the project and available 
resources as permitted by Sec.  55.7(f), climate-informed analysis of 
factors including development patterns, streamflow, and hydrologic and 
hydraulic modeling;
    (B) Topographic information that can inform flooding patterns and 
distance to flood sources, as described in flood mapping, Flood 
Insurance Studies, and other data sources; and
    (C) Public safety communications and data related to flood risk 
including available information on structures such as dams, levees, or 
other flood protection infrastructure located in proximity to the site.
    (ii) Impacts to lives and property include:
    (A) Potential loss of life, injury, or hardship to residents of the 
subject property during a flood event;
    (B) Damage to the subject property during a flood event;
    (C) Damage to surrounding properties from increased runoff or 
reduction in floodplain function during a flood event due to 
modification of the subject site;
    (D) Health impacts due to exposure to toxic substance releases that 
may be caused or exacerbated by flood events; and
    (E) Damage to a community as a result of project failure (e.g., 
failure of stormwater management infrastructure due to scouring).
    (iii) Impacts to natural and beneficial values include changes to:
    (A) Water resources such as natural moderation of floods, water 
quality maintenance, and groundwater recharge;
    (B) Living resources such as flora and fauna (if the project 
requires consultation under 24 CFR 50.4(e) or 58.5(e), consultation 
with the U.S. Fish and Wildlife Service or National Marine Fisheries 
Service must include a description of impacts evaluated under this 
part);
    (C) Cultural resources such as archaeological, historic, aesthetic 
and recreational aspects; and
    (D) Agricultural, aquacultural, and forestry resources.
    (2) Wetland evaluation. In accordance with section 5 of Executive 
Order 11990, the decision maker shall consider factors relevant to a 
proposal's effect on the survival and quality of the wetland. Factors 
that must be evaluated include, but are not limited to:
    (i) Public health, safety, and welfare, including water supply, 
quality, recharge, and discharge; pollution; flood and storm hazards 
and hazard protection; and sediment and erosion, including the impact 
of increased quantity or velocity of stormwater runoff on, or to areas 
outside of, the proposed site;
* * * * *
    (e) Step 5. Where practicable, design or modify the proposed action 
to minimize the potential adverse impacts to and from the FFRMS 
floodplain or wetland and to restore and preserve their natural and 
beneficial functions and values.
    (1) Elevation. For actions in the FFRMS floodplain, the required 
elevation described in this section must be documented on an Elevation 
Certificate or a Floodproofing Certificate in the Environmental Review 
Record prior to construction, or by such other means as HUD may from 
time to time direct, provided that notwithstanding any language to the 
contrary, the minimum elevation or floodproofing requirement for new 
construction or substantial improvement actions shall be the elevation 
of the FFRMS floodplain as defined in this section.
    (i) If a residential structure undergoing new construction or 
substantial improvement is located in the FFRMS floodplain, the lowest 
floor or FEMA-approved equivalent must be designed using the elevation 
of the FFRMS floodplain as the baseline standard for elevation, except 
where higher elevations are required by Tribal, State, or locally 
adopted code or standards, in which case those higher elevations apply. 
Where non-elevation standards such as setbacks or other flood risk 
reduction standards that have been issued to identify, communicate, or 
reduce the risks and costs of floods are required by Tribal, State, or 
locally adopted code or standards, those standards shall apply in 
addition to the FFRMS baseline elevation standard.
    (ii) New construction and substantial improvement of residential 
structures that have no dwelling units below the FFRMS floodplain and 
that are not critical actions as defined at Sec.  55.2(b)(3), or of 
non-residential structures, shall be designed either:
    (A) With the lowest floor, including basement, elevated to or above 
the elevation of the FFRMS floodplain; or
    (B) With the structure floodproofed at least up to the elevation of 
the FFRMS floodplain. Floodproofing standards are as stated in FEMA's 
regulations at 44 CFR 60.3(c)(3)(ii) and (c)(4)(i), or such other 
regulatory standard as FEMA may issue, and applicable guidance, except 
that where the standard refers to base flood level, floodproofing is 
required at or above the FFRMS floodplain, as defined in this part.
    (iii) The term ``lowest floor'' must be applied consistent with 
FEMA regulations in 44 CFR 59.1 and FEMA's Elevation Certificate 
guidance or other applicable current FEMA guidance.
    (2) Minimization. Potential harm to or within the floodplain and/or 
wetland must be reduced to the smallest possible amount. E.O. 11988's 
requirement to minimize potential harm applies to the

[[Page 30912]]

investment at risk or the flood loss potential of the action itself, 
the impact the action may have on others, and the impact the action may 
have on floodplain and wetland values. The record must include a 
discussion of all minimization techniques that will be incorporated 
into project designs as well as those that were considered but not 
approved. Minimization techniques for floodplain and wetlands purposes 
include, but are not limited to:
    (i) Stormwater management and green infrastructure: The use of 
permeable surfaces; natural landscape enhancements that maintain or 
restore natural hydrology through infiltration, native plant species, 
bioswales, rain gardens, or evapotranspiration; stormwater capture and 
reuse; green or vegetative roofs with drainage provisions; WaterSense 
products; rain barrels and grey water diversion systems; protective 
gates or angled safety grates for culverts and stormwater drains; and 
other low impact development and green infrastructure strategies, 
technologies, and techniques. Where possible, use natural systems, 
ecosystem processes, and nature-based approaches when developing 
alternatives for consideration.
    (ii) Adjusting project footprint: Evaluate options to relocate or 
redesign structures, amenities, and infrastructure to minimize the 
amount of impermeable surfaces and other impacts in the FFRMS 
floodplain or wetland. This may include changes such as designing 
structures to be taller and narrower or avoiding tree clearing to 
reduce potential erosion from flooding.
    (iii) Resilient building standards: Consider implementing resilient 
building codes or standards to ensure a reliable and consistent level 
of safety.
    (iv) Severe Repetitive Loss (SRL) mitigation: Identify and 
incorporate FEMA identified SRL mitigation as outlined in Sec.  
55.8(c), if applicable.
    (3) Restoration and preservation. Restore means to reestablish a 
setting or environment in which the natural and beneficial values of 
floodplains and wetlands could again function. Where floodplain and 
wetland values have been degraded by past actions, restoration is 
informed by evaluation of the impacts of such actions on beneficial 
values of the floodplain or wetland and identification, evaluation, and 
implementation of practicable measures to restore the values diminished 
or lost. Preserve means to prevent modification to the natural 
floodplain or wetland environment or to maintain it as closely as 
possible to its natural state. If an action will result in harm to or 
within the floodplain or wetland, HUD or the responsible entity must 
ensure that the action is designed or modified to assure that it will 
be carried out in a manner which preserves as much of the natural and 
beneficial floodplain and values as is possible. Restoration and 
preservation techniques for floodplain and wetlands purposes include, 
but are not limited to:
    (i) Natural Resource Conservation Service or other conservation 
easements;
    (ii) Appropriate and practicable compensatory mitigation, which is 
required for unavoidable adverse impacts to more than one acre of 
wetlands. Compensatory mitigation includes but is not limited to: 
permittee-responsible mitigation, mitigation banking, in-lieu fee 
mitigation, the use of preservation easements or protective covenants, 
and any form of mitigation promoted by State or Federal agencies. The 
use of compensatory mitigation may not substitute for the requirement 
to avoid and minimize impacts to the maximum extent practicable.
    (4) Planning for residents' and occupants' safety. (i) For 
multifamily residential properties and residential healthcare 
facilities, an evacuation plan must be developed that includes safe 
egress route(s) out of the FFRMS floodplain, plans for evacuating 
residents with special needs, and clear communication of the evacuation 
plan and safety resources for residents.
    (ii) For all healthcare facilities, evacuation route(s) out of the 
FFRMS floodplain must be identified and clearly communicated to all 
residents and employees. Such actions must include a plan for emergency 
evacuation and relocation to a facility of like capacity that is 
equipped to provide required critical needs-related care and services 
at a level similar to the originating facility.
    (iii) All critical actions in the FFRMS floodplain must operate and 
maintain an early warning system that serves all facility occupants.
    (f) Step 6. HUD or the responsible entity shall consider the 
totality of the previous steps and the criteria in this section to make 
a decision as to whether to approve, approve with modifications, or 
reject the proposed action. Adverse impacts to floodplains and wetlands 
must be avoided if there is a practicable alternative. This analysis 
must consider:
* * * * *
    (2) * * *
    (ii) A reevaluation of alternatives under this step should include 
a discussion of economic costs. For floodplains, the cost estimates 
should include savings or the costs of flood insurance, where 
applicable; flood proofing; replacement of services or functions of 
critical actions that might be lost; and elevation to at least the 
elevation of the FFRMS floodplain, as appropriate based on the 
applicable source under Sec.  55.7. For wetlands, the cost estimates 
should include the cost of filling the wetlands and mitigation.
    (iii) If the proposed activity is located in or affects a community 
with environmental justice concerns, the reevaluation must address 
public input provided during environmental justice outreach, if 
conducted, and must document the ways in which the activity, in light 
of information analyzed, mitigation measures applied, and alternatives 
selected, serves to reduce any historical environmental disparities 
related to flood risk or wetlands impacts in the community.
    (g) * * *
    (1) If the reevaluation results in a determination that there is no 
practicable alternative to locating the proposal in the FFRMS 
floodplain or the wetland, publish a final notice that includes:
* * * * *

0
17. Revise Sec.  55.21 to read as follows:


Sec.  55.21  Alternate processing for existing nonconforming sites.

    Notwithstanding the limitations on HUD assistance defined in Sec.  
55.8, in exceptional circumstances, the Assistant Secretary for 
Community Planning and Development may approve HUD assistance or 
insurance to improve an existing property with ongoing HUD assistance 
or mortgage insurance if the following conditions are satisfied:
    (a) HUD completes an environmental review pursuant to 24 CFR part 
50, including the 8-step decision making process pursuant to Sec.  
55.20, that:
    (1) Documents that it is not practicable to transfer the HUD 
assistance to a site with lower flood risk under existing program 
rules, financial limitations, and site availability; and
    (2) Mandates measures to ensure that the elevated flood risk is the 
only environmental hazard or impact that does not comply or that 
requires mitigation to comply, with HUD's environmental requirements at 
24 CFR parts 50, 51, 55, and 58; and
    (b) The proposed project incorporates all practicable measures to 
minimize flood risk, preserve the function of the floodplain and any 
impacted wetlands as described in Sec.  55.20(e), and increase the 
overall resilience of the site, as approved and/or required by HUD. At 
minimum, these measures must include:

[[Page 30913]]

    (1) Removal of all residential units and critical action structures 
from the floodway;
    (2) Identification of evacuation routes out of the FFRMS 
floodplain;
    (3) A No-Rise Certification for any new improvements in the 
floodway; and
    (4) Elevation (or floodproofing pursuant to Sec.  55.20(e)(1)) of 
existing structures within the FFRMS Floodplain, where practicable.


Sec.  Sec.  55.22, 55.24, and 55.25  [Removed and Reserved]

0
18. Remove and reserve Sec. Sec.  55.22, 55.24, and 55.25.

0
19. Amend Sec.  55.26 by revising the section heading, the introductory 
text, and paragraphs (b)(1) and (c) to read as follows:


Sec.  55.26  Adoption of another agency's review under the Executive 
orders.

    If a proposed action covered under this part is already covered in 
a prior review performed under Executive Order 11988 or Executive Order 
11990 by another agency, including HUD or a different responsible 
entity, that review may be adopted by HUD or by a responsible entity 
authorized under 24 CFR part 58 without further public notice, provided 
that:
* * * * *
    (b) * * *
    (1) The action currently proposed has not substantially changed in 
project description, scope, and magnitude from the action previously 
reviewed by the other agency; and
* * * * *
    (c) HUD assistance must be conditioned on mitigation measures 
prescribed in the previous review.


Sec.  Sec.  55.27 and 55.28  [Removed]

0
20. Remove Sec. Sec.  55.27 and 55.28.

0
21. Add subpart D, consisting of Sec.  55.30, to read as follows:

Subpart D--Severability


Sec.  55.30  Severability.

    Any provision of this part held to be invalid or unenforceable as 
applied to any action should be construed so as to continue to give the 
maximum effect to the provision permitted by law, unless such holding 
is that the provision of this part is invalid and unenforceable in all 
circumstances, in which event the provision should be severable from 
the remainder of this part and shall not affect the remainder thereof.

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD 
ENVIRONMENTAL REVIEW RESPONSIBILITIES

0
22. The authority citation for part 58 is revised to read as follows:

    Authority:  12 U.S.C. 1707 note, 1715z-13a(k); 25 U.S.C. 4115 
and 4226; 42 U.S.C. 1437x, 3535(d), 3547, 4321-4336e, 4852, 5304(g), 
12838, and 12905(h); title II of Pub. L. 105-276; E.O. 11514 as 
amended by E.O. 11991, 3 CFR, 1977 Comp., p. 123.

0
23. Amend Sec.  58.5 by revising paragraph (b)(1) to read as follows:


Sec.  58.5  Related Federal laws and authorities.

* * * * *
    (b) * * *
    (1) Executive Order 11988, Floodplain Management, as amended by 
Executive Order 13690, February 4, 2015 (3 CFR, 2016 Comp., p. 268), as 
implemented in HUD regulations at 24 CFR part 55, particularly section 
2(a) of Executive Order 11988, as amended.
* * * * *


Sec.  58.43  [Amended]

0
24. Amend Sec.  58.43 in paragraph (a) by:
0
a. Removing ``tribal, local, State and Federal agencies;'' and add in 
its place ``Tribal, Federal, State, and local agencies''; and
0
b. Adding ``or on an appropriate Government website that is accessible 
to individuals with disabilities and provides meaningful access for 
individuals with Limited English Proficiency'' after ``affected 
community'' in the third sentence.

0
25. Revise and republish Sec.  58.45 to read as follows:


Sec.  58.45  Public comment periods.

    Required notices must afford the public the following minimum 
comment periods, counted in accordance with Sec.  58.21:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
(a) Notice of Finding of No         15 days when published in a general
 Significant Impact (FONSI).         circulation newspaper or on a
                                     Government website that is
                                     accessible to individuals with
                                     disabilities and provides
                                     meaningful access for individuals
                                     with Limited English Proficiency
                                     or, if no publication, 18 days when
                                     mailing and posting.
(b) Notice of Intent to Request     7 days when published in a general
 Release of Funds (NOI-RROF).        circulation newspaper or on a
                                     Government website that is
                                     accessible to individuals with
                                     disabilities and provides
                                     meaningful access for individuals
                                     with Limited English Proficiency
                                     or, if no publication, 10 days when
                                     mailing and posting.
(c) Concurrent or combined notices  15 days when published in a general
                                     circulation newspaper or on a
                                     Government website that is
                                     accessible to individuals with
                                     disabilities and provides
                                     meaningful access for individuals
                                     with Limited English Proficiency
                                     or, if no publication, 18 days when
                                     mailing and posting.
------------------------------------------------------------------------

Sec.  58.59  [Amended]

0
26. Amend Sec.  58.59 in paragraph (b) introductory text by adding ``or 
on an appropriate government website that is accessible to individuals 
with disabilities and provides meaningful access for individuals with 
Limited English Proficiency'' after ``news media''.

PART 200--INTRODUCTION TO FHA PROGRAMS

0
27. The authority citation for part 200 continues to read as follows:

    Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).

0
28. Amend Sec.  200.926d by
0
a. Revising paragraphs (c)(4)(i) through (iii);
0
b. Removing paragraph (c)(4)(iv); and
0
c. Redesignating paragraphs (c)(4)(v) and (vi) as paragraphs (c)(4)(iv) 
and (v), respectively.
    The revisions read as follows:


Sec.  200.926d  Construction requirements.

* * * * *
    (c) * * *
    (4) * * *
    (i) Residential structures located in Special Flood Hazard Areas. 
The elevation of the lowest floor (including basements and other 
permanent enclosures) shall be at least two feet above the base flood 
elevation (see 24 CFR 55.8(b) for appropriate data sources).
    (ii) Residential structures located in FEMA-designated ``coastal 
high hazard areas.'' Where FEMA has determined the base flood level 
without establishing stillwater elevations, the bottom of the lowest 
structural member of the lowest floor (excluding pilings and columns) 
and its horizontal supports shall be at least two feet above the base 
flood elevation.
    (iii) New construction. (A) In all cases in which a Direct 
Endorsement (DE) mortgagee or a Lender Insurance (LI) mortgagee seeks 
to insure a mortgage on a one- to four-family dwelling that is newly 
constructed (including a newly

[[Page 30914]]

erected manufactured home) that was processed by the DE or LI 
mortgagee, the DE or LI mortgagee must determine whether the property 
improvements (dwelling and related structures/equipment essential to 
the value of the property and subject to flood damage) are located on a 
site that is within a Special Flood Hazard Area, as designated on maps 
of the Federal Emergency Management Agency. If so, the DE mortgagee, 
before submitting the application for insurance to HUD, or the LI 
mortgagee, before submitting all the required data regarding the 
mortgage to HUD, must obtain:
    (1) A final Letter of Map Amendment (LOMA);
    (2) A final Letter of Map Revision (LOMR); or
    (3) A signed Elevation Certificate documenting that the lowest 
floor (including basements and other permanent enclosures) of the 
property improvements is at least two feet above the base flood 
elevation as determined by FEMA's best available information (or 
documenting that the lowest floor meets HUD's elevation standard for 
newly erected manufactured housing in 24 CFR 203.43f or 24 CFR part 
3285, as applicable).
    (B) Under the DE program, these mortgages are not eligible for 
insurance unless the DE mortgagee submits the LOMA, LOMR, or Elevation 
Certificate to HUD with the mortgagee's request for endorsement.
* * * * *

    Dated: March 20, 2024.
Marcia L. Fudge,
Secretary.
[FR Doc. 2024-06246 Filed 4-22-24; 8:45 am]
BILLING CODE 4210-67-P