FHA issued Mortgagee Letter 2025-17 rescinding the policy guidance announced in Mortgagee Letter 2024-20. Mortgagee Letter 2024-20 required that the lowest floor in newly constructed properties located within the one-percent-annual-chance (100-year) floodplain be built at least 2 feet above the Base Flood Elevation (BFE). Per the Mortgagee Letter (ML), FHA restored the following to HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Handbook 4000.1):
- Section titles and policy in Eligibility for New Construction in SFHAs (II.A.1.b.iv(A)(1)(b) and II.B.2.b.iii(A)(4)(b));
- Section titles in Eligibility for Existing Construction in SFHAs (II.A.1.b.iv(A)(1)(c) and II.B.2.b.iii(A)(4)(c));
- Section titles in Eligibility for Condominiums in SFHAs (II.A.1.b.iv(A)(1)(d) and II.B.2.b.iii(A)(4)(d));
- Section titles and policy in Eligibility for Manufactured Housing in SFHAs (II.A.1.b.iv(A)(1)(e) and II.B.2.b.iii(A)(4)(e)); and
- Requirements for New Construction in Site Considerations – Flood Hazard Areas (II.A.8.i.vii(A)(5)).
The provisions of this ML went into effect June 27, 2025.
Click to view the FHA Mortgagee Letter 2025-17: https://www.tenaco.com/wp-content/uploads/2025/07/FHA-Mortgagee-Letter-2025-17-06-27-25.pdf
