skip to main content
This is the start of the main content


FHA to Propose Accepting Private Flood Insurance

The question of whether the Department of Housing and Urban Development (HUD) accepts private flood insurance policies will finally be clarified. HUD has proposed to amend the Federal Housing Administration (FHA) rules to explicitly permit the use of private flood insurance on FHA loans in Special Flood Hazard Areas (SFHAs). The current FHA Regulations conflict with the Biggert Waters Flood Insurance Reform Act of 2012 (Biggert Waters), which requires lending institutions, federal agency lenders, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) to accept private flood insurance, causing some lenders to refuse to accept private flood insurance policies on FHA loans.

Last year, multiple industry groups issued a joint letter to the FHA requesting the agency to revise its rules regarding the acceptance of private flood insurance. With the recent announcement, the FHA is expected to release a proposed rule at the end of 2018 or sometime in 2019.

Please contact your PFI Client Relationship manager if have any questions regarding this topic. Proctor will continue to monitor this topic and provide updates as they develop.