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The final rule posted to the Federal Register today by HUD extends to FHA borrowers more insurance choices that have only been available to conventional loan holders. The previous FHA rule was written decades ago when there was no private flood insurance market. The market today is increasingly providing more alternative options than just the National Flood Insurance Program. Conventional borrowers have been able to choose between NFIP and private policies since the federal lending regulators issued a final regulation in 2019. Now, because of this new rule, FHA loan holders will have the option to choose flood insurance in the market to meet federal coverage requirements. While the FHA will remain the primary provider of federally backed and insured mortgages, this is a victory for homeowners who deserve more affordable rates and options when it comes to their flood insurance.
Consumer Choice is Key
The previous FHA rule was written when there was no private flood insurance market. The market today is providing alternative options other than just the National Flood Insurance Program (NFIP). Conventional borrowers have been able to choose between NFIP and private policies since the federal lending regulators issued a final regulation in 2019. Now, because of this new rule, FHA loan holders will have the option to choose flood insurance to meet federal coverage requirements providing them with more choice and potentially saving them money on their premium costs.
In conclusion, the final rule in the Federal Register extends to FHA borrowers flood insurance choices, the same choices that have been available to conventional loan holders. This is giving home buyers/owners more choice when it comes to their flood insurance coverage. We believe that this is a big win for home buyers/owners who deserve more affordable rates and options. This decision by HUD is a victory for homeowners across the country who should have the right to choose what’s best for them.