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HUD to allow borrowers of FHA mortgages to obtain private flood insurance

Homeowners with the Federal Housing Administration-insured mortgage financing will now be allowed to obtain private flood insurance policies, expanding consumer options to protect borrowers from the country’s major natural disaster. 

The U.S. Department of Housing and Urban Development, through the FHA, announced on Monday that the change will go into effect on December 21, 2022. The final rule was published in the Federal Register and in a companion mortgagee letter that provides implementation guidance for FHA-approved lenders. 

The prior FHA rule had been in place since 1968, when the private insurance market was non-existent, and it mandated that details ⇒

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