On May 6, NAR submitted comments on a recent Executive Order published by the White House, the Federal Flood Insurance Risk Management Standard (FFRMS).
The FFRMS requires that all new or rebuilt federally funded projects in and around a floodplain must build to a higher flooding standard to account for the increased risks in the floodplain. It requires agencies to assess and plan for both current and future flood risk in a project's siting, planning and construction.
The comment letter expresses concerns about the ambiguity in the language of the EO, the FFRMS and the draft Agency Guidelines. While FEMA has stated that this action does not impact the NFIP, NAR is concerned that there could be unintended consequences that could negatively impact the NFIP and property owners in the floodplain. The letter requests that FEMA develop additional material that clarifies this information.
The EO requires each federal agency to incorporate a new floodplain definition and flood-risk reduction strategies into their existing programs, projects and activities and establishes a process for how each agency will develop their own FFRMS implementation plan.
The measure will impact all new or expected-to-be rebuilt structures that use federal funding. This could include roads, bridges, ports or military installations. It could also include hospitals, emergency shelters or energy projects. It could also affect homes or businesses that use federal funds to rebuild after a hurricane or flooding event.
According to FEMA, the FFRMS will NOT affect rates or premiums under the National Flood Insurance Program, nor will it impact federally-backed mortgages supported by the Federal Housing Administration or mortgages bought and sold on the secondary mortgage by Fannie and Freddie.