Primer on Executive Order 11988: Floodplain Management

Primer on Executive Order 11988: Floodplain Management There are new floodplain management requirements as a result of Executive Order 11988 and the expanded floodplain definition under Executive Order 13690. These changes are expected to particularly impact federal multifamily housing programs. This information represents the best available at this time, but is subject to change. OVERVIEW On Jan. 30, 2015, President Obama signed Executive Order (EO) 13690 Establishing a Federal Flood Risk Management Standard to update EO 11988 Floodplain Management. EO 11988, signed by President Carter in 1977, requires federal agencies to avoid, to the extent possible, adverse impacts associated with occupancy and modification of floodplains and to avoid support of floodplain development wherever an alternative exists. EO 11988 directs federal agencies to provide leadership and take action to reduce the risk of flood loss, to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains in carrying their responsibilities for: (1) acquiring, managing, and disposing of federal lands, and facilities; (2) providing federally undertaken, financed, or assisted construction and improvements; and (3) conducting federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating and licensing activities. For nearly four decades, EO 11988 s floodplain management requirements have been tied to federal actions that affect the area subject to a 1%-or-greater chance of flooding in any given year in other words, the 100-year floodplain. EO 13690, however, amends EO 11988 by creating a Federal Flood Risk Management Standard (FFRMS) that expands this definition beyond the long-established 100-year floodplain. Draft Implementing Guidelines released after EO 13690 was signed indicated the FFRMS would apply to all federal actions, including federally approved permits, federally backed home loans, and flood insurance regulations. Over the course of eight public listening sessions held across the country during March and April 2015 in Ames, Iowa; Biloxi, Miss.; Sacramento, Calif.; Norfolk and Fairfax, Va.; New York; Dallas and Seattle, NAHB members showed up in force to voice concerns over the unintended consequences the FFRMS could have on federal permits, programs and products home builders rely upon. On May 6, NAHB filed comprehensive comments in response to the Draft Implementation Guidelines to address procedural shortcomings and practical concerns associated with the FFRMS and its implementation. NAHB also provided detailed 1

recommendations as to how the Administration could rectify the myriad unintended consequences associated with the expanded floodplain definitions. Congress has followed NAHB s lead in questioning the legality and scope of the new floodplain standard. Nearly 100 members have signed letters to the Administration on this issue, and some have even filed official comments with FEMA. NAHB has been working with Congressional offices to propose riders for FY2017 appropriations bills to prohibit implementation of the expansive floodplain definitions and regulations. Initial Victories We were pleased that certain concerns we raised during the public listening sessions, with our comments on the Draft Implementing Guidelines, and in one-on-one meetings with federal regulators are being addressed as the government begins to implement EO 13690. While these guidelines applied the expanded FFRMS floodplain definition to all federal actions including permits, the government released Final Guidelines for Implementing EO 13690 in October 2015 that narrow the scope of the expanded floodplain to only federally funded projects, defined as actions where Federal funds are used for new construction, substantial improvement, or to address substantial damage to structures and facilities. And, the Army Corps released a fact sheet entitled Applicability of Floodplain Management and FFRMS Executive Orders to USACE Permitting Authorities stating: Clean Water Act 404 wetland permits will not be subject to the expanded floodplain standard. The Corps will continue to review permit applications by applying the area subject to the 100-year flood. FEMA released The Applicability of EO 11988/13690 to FEMA Programs, stating: The FFRMS will not change the minimum floodplain management criteria that communities must adopt in order to participate in the NFIP for flood-prone areas, FEMA s flood mapping standards, or the rating and claims practices of the NFIP. The FFRMS will have no effect on the cost or availability of federal flood insurance for policyholders. And the Department of Housing and Urban Development (HUD) has said that the standard will not apply to FHA-insured single-family mortgages on either existing or newly built properties. Outstanding Challenges While these are all significant victories, we still face major problems. It appears the expanded floodplain standard will apply to certain HUD multifamily mortgage insurance and grant 2

programs, FHA 203(k) rehab loans, and USDA Rural Development housing programs used for new construction or substantial rehabilitation in the newly defined floodplain. And FEMA has indicated that the FFRMS will apply to the Hazard Mitigation Assistance Grants, the Public Assistance Program, and any other FEMA grants that fund construction activities in or affecting a floodplain. To address the issues our multifamily members face, NAHB created the Task Force on the Multifamily Impact of the New Federal Flood Risk Management Standard. The task force will examine how this standard the availability and cost of capital, the supply of funds from federal programs used in the multifamily sector, and the supply and cost of rental housing. The task force is further charged with recommending strategies for NAHB to pursue to prevent or ameliorate adverse outcomes from the Executive Order for the multifamily housing sector. NAHB is gravely concerned that the federal agencies responsible for implementing EO 13690 will impose costly and burdensome requirements on multifamily builders who use federal financing for new construction or substantial rehabilitation of apartment communities. However, federal agencies will first have to go through rulemaking. This will provide NAHB staff and members further opportunities to respond before the regulations go into effect. AGENCIES MUST CHOOSE A NEW FLOODPLAIN DEFINITION The FFRMS expands the floodplain area for all federally funded projects, defined as actions where Federal funds are used for new construction, substantial improvement, or to address substantial damage to structures and facilities. Importantly, as the floodplain expands, more properties will be deemed in the floodplain, and more projects will trigger the floodplain management requirements. Agencies have three options to define the floodplain when federal funding is involved: Climate-Informed Science Approach the elevation and flood hazard area that result from using the best available data and methods that integrate current and future changes in flooding based on climate science; Freeboard Value Approach the elevation and flood hazard area that result from adding an additional 2 feet of elevation to the 100-year base flood elevation (BFE) for non-critical actions and from adding an additional 3 feet of elevation to the BFE for critical actions 1 ; or 500-year Floodplain Approach the elevation and flood hazard area that correspond with the area subject to flooding by the 0.2%-annual-chance flood. 1 Critical actions are defined as any activity for which even a slight chance of flooding would be too great. Examples of critical actions include activities involving structures such as hospitals, nursing homes, prisons, and schools, as well as structures containing irreplaceable resources. 3

EO 13690 requires each federal agency to incorporate the new floodplain definition and floodrisk management strategies into their existing programs and regulations through rulemaking. For those federal actions that do not meet the definition of federally funded projects, such as federal permitting for otherwise non-federal projects, floodplain management regulations will remain limited to activities impacting the 100-year floodplain. Additionally, the FFRMS will not change the minimum floodplain management criteria that communities must adopt to participate in the National Flood Insurance Program (NFIP) for flood-prone areas, FEMA s flood mapping standards, or the rating and claims practices of the NFIP. The NFIP mandatory flood insurance purchase requirement for loans made by federally regulated lending institutions remains limited to those structures located in the 100-year floodplain according to FEMA s Flood Insurance Rate Maps (FIRMs). ESTIMATED EXPANSION OF THE FLOODPLAIN Importantly, EO 11988 was originally limited to the 100-year floodplain for which FEMA has a robust library of FIRM maps. From these maps, one can quickly determine if a parcel of land falls within the 100-year floodplain. However, the federal government has not yet produced any maps depicting the extent of the floodplain according to the climate informed science or freeboard value approaches. And in many locations, the 500-year floodplain is not mapped on FEMA FIRMs. NAHB is especially concerned that the lack of national maps injects significant uncertainty into the multifamily construction. Although maps have not been made available, initial examination of the freeboard value and 500-year floodplain approaches show an extensive expansion beyond the 100-year floodplain. Freeboard Value Approach: Figure 1 (on the next page) illustrates floodplain expansion associated with the freeboard value approach. The increased flood elevation is represented by the vertical increase beyond the 100-year base flood elevation (BFE). Note that as the vertical extent increases, so too does the horizontal extent of the floodplain. Areas in the gray region are within the 100-year floodplain and are currently subject to the various floodplain requirements, including EO 11988 as originally written and flood insurance regulations under the National Flood Insurance Program (NFIP). Areas in the tan region are outside the 100-year floodplain and no floodplain restrictions have historically been imposed therein. Under this freeboard value approach, both the gray and tan areas now fall within the floodplain, and all federally funded projects within the expanded floodplain must comply with EO 11988 s floodplain management requirements. While the schematic illustrates this expansion generally, federal agencies have not provided maps depicting the specific extent of the floodplain according to this approach. In the absence of definitive maps, multifamily builders will likely have to hire professional land surveyors to determine whether a project is in the new floodplain and if the project must comply with EO 11988. 4

Figure 1. Illustration of the vertical flood elevation increase and corresponding horizontal floodplain expansion under the freeboard value approach. Shaded gray = 100-year floodplain. Shaded tan = freeboard value floodplain. 500-year Floodplain Approach: In addition to mapping the 100-year floodplain, some FEMA FIRMs delineate the 500-year floodplain. To assess differences between the two, NAHB commissioned a floodplain area study in 15 cities where both floodplains have been mapped. Averaged across the studies, the 500-year floodplain covered 55% more land area relative to the 100-year floodplain (Table 1 on the next page). To further illustrate the potential floodplain expansion in accordance with the 500-year floodplain approach, Figure 2 (on p. 7) depicts the substantial increase when comparing the 100-year floodplain (blue) and the 500- year floodplain (orange) within the Sacramento, Calif., city limits. Although 500-year floodplain maps are available for the 15 cities listed, it is important to note that the 500-year floodplain is not mapped across all FEMA FIRMs. In those instances, builders and developers will not know if their projects triggers federal floodplain management requirements without contracting engineers to conduct a costly floodplain mapping analysis. 5

Table 1. 100-year and 500-year floodplain area in 15 cities across the U.S. City Acres in 100-year floodplain Acres in 500-year floodplain % Increase in floodplain area Austin, TX 47310 63290 33.8 Dallas, TX 56564 61359 8.5 Houston, TX 104888 152854 45.7 Patterson and Woodland Park, NJ 782 1246 59.3 Barrington, RI 2307 3627 57.2 Staten Island, NY 7500 9620 28.3 Philadelphia, PA 11910 15655 31.4 Fredericksburg, VA 270 653 141.9 Washington, DC 7352 8352 13.6 Richmond, VA 4150 5455 31.4 Alexandria, VA 869 1260 45 Hampton, VA 10605 12965 22.3 Redding, CA 3552 6124 72.4 San Diego, CA 21694 25896 19.4 Sacramento, CA 16757 51853 209.4 Average % increase in floodplain area 54.6 (+/- 13.9) 6

Figure 2. FEMA 100-year and 500-year floodplains within Sacramento, Calif. city limits. Blue = 100-year floodplain area. Orange = 500-year floodplain area. 7

HISTORIC IMPACT OF EO 11988 ON FEDERAL MULTIFAMILY HOUSING PROGRAMS In the late 1970s, HUD USDA implemented EO 11988 through rulemaking. The regulations governing development in the 100-year floodplain that uses federal funding are found at 24 CFR Part 55 for HUD and 7 CFR Part 1940 for USDA Rural Housing Service Programs. Generally speaking, these existing regulations for include requirements to: purchase flood insurance under the National Flood Insurance Program (NFIP) complete a floodplain management eight-step decision-making (Figure 3), and in most instances, elevate structures 1 foot above the 100-year base flood elevation (BFE) Figure 3: Eight-step decision-making for EO 11988. A detailed summary of this begins on p. 14. 8

ANTICIPATED IMPACT OF EO 13690 ON FEDERAL MULTIFAMILY HOUSING PROGRAMS How will federal agencies that administer multifamily programs define the floodplain? In the Fall 2015 Unified Agenda 2, HUD indicated it will comply with the EO 13690 and the FFRMS by using the freeboard value approach. HUD states that to ensure compliance with EO 11988 as amended, new construction or substantial improvement in a floodplain [must] be elevated or flood proofed 2 feet above the base flood elevation for non-critical actions and 3 feet above the base flood elevation for critical action. Senior HUD staff have also indicated the department is leaning heavily toward the freeboard value option. USDA, which administers multiple multifamily housing programs under the Rural Development (RD) office, has yet to indicate which definition it will use. A key challenge for developers if the agencies adopt the freeboard value approach will be determining the extent of the new floodplain. As previously described, the floodplain expands both vertically and horizontally under this approach. Unlike the 100-year floodplain, there are no national maps to determine the limits of the expanded freeboard value floodplain. Until such maps are developed, builders may have to rely on surveyors to determine the new floodplain boundaries. Due to the uncertainty, additional regulatory burden and increased costs that builders will have to bear, NAHB has strongly urged HUD not to implement the rule until maps defining the new floodplains are produced by the appropriate federal agency. Which multifamily programs are likely to be affected? We anticipate new construction or substantial rehabilitation that uses HUD or USDA grants or multifamily mortgage programs will have to comply with the floodplain management requirements of EO 11988 when those activities occur within the expanded floodplain as defined by EO 13690 and the FFRMS. The Internal Revenue Service has given no indication that it will release new floodplain management regulations for its Low Income Housing Tax Credit (LIHTC) and state and local housing finance agency tax-exempt bond-financed multifamily properties. At this time, NAHB does not anticipate these properties will be required to adhere to the new requirements unless there is covered HUD or USDA funding on the property. In those cases, HUD or USDA rules would apply. 2 The Unified Agenda of Federal Regulatory and Deregulatory Actions, more commonly known as the Unified Agenda, is a semiannual publication of all the regulatory actions federal agencies are considering. Executive Order 12866, Regulatory Planning and Review, requires agencies prepare such an agenda in order to improve coordination among divisions of the federal government and to notify the public of upcoming actions. 9

Under existing HUD regulations, EO 11988 does not apply to HUD refinancing of existing multifamily structures. HUD has indicated they will not require insured mortgage refinancing programs to comply with floodplain management requirements going forward. NAHB analysis suggests a myriad of HUD, USDA-RD, and IRS programs may be impacted. The following matrix summarizes current floodplain management requirements triggered by projects within the 100-year floodplain and predicted changes in light of the expanded floodplain definition for multifamily housing programs used by NAHB members (Table 2, beginning below). These predictions are based upon: Applicability of the existing Floodplain Management EO 11988 according to current federal agency regulations; Communications with federal agency staff; Anticipated adoption of the freeboard value approach to define the floodplain in accordance with EO 13690 and the FFRMS for HUD programs; and NAHB s analysis of EO 13690, the FFRMS, and the updated EO 11988 implementing guidelines. 3 PROGRAM AGENCY PURPOSE CURRENT EO 11988 FLOODPLAIN MGMT REQUIREMENT (100-YR FLOODPLAIN) ANTICIPATED EO 13690 FLOODPLAIN MGMT REQUIREMENT (FFRMS FLOODPLAIN) Section 221(d)(4) Mortgage Insurance for Rental and Cooperative Housing HUD-FHA NC / SR* Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE** 8-step decision making Elevate structure 2 feet above 100-yr BFE Section 220 Mortgage Insurance for Rental Housing for Urban Renewal and Concentrated Development Areas HUD-FHA NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE 8-step decision making Elevate 2 feet above 100-yr BFE 3 Guidelines for Implementing Executive Order 11988, Floodplain Management, and Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input. Oct. 8, 2015. Available at http://www.fema.gov/media-library/assets/documents/110377 10

CURRENT EO 11988 FLOODPLAIN MGMT REQUIREMENT (100-YR FLOODPLAIN) HUD-FHA NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE PROGRAM AGENCY PURPOSE Section 231 Mortgage Insurance for Rental Housing for the Elderly ANTICIPATED EO 13690 FLOODPLAIN MGMT REQUIREMENT (FFRMS FLOODPLAIN) 8-step decision making Elevate 2 OR 3 feet above 100-yr BFE+ Section 241(a) Mortgage Insurance for Supplemental Loans for Multifamily Projects HUD-FHA NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE 8-step decision making Elevate 2 feet above 100-yr BFE Section 223(f) Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing HUD-FHA Refinancing Flood insurance No EO 11988 requirements No EO 13690 requirements Section 223(a)(7) Refinancing of Existing Insured Mortgages HUD-FHA Refinancing Flood insurance No EO 11988 requirements No EO 13690 requirements Project Based Rental Assistance (Section 8) HUD- Housing Rental Subsidy Flood insurance No EO 11988 requirements No EO 13690 requirements HOME Investment Partnership Program HUD-CPD NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE 8-step decision making Elevate 2 feet above 100-yr BFE 11

CURRENT EO 11988 FLOODPLAIN MGMT REQUIREMENT (100-YR FLOODPLAIN) HUD-CPD NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE PROGRAM AGENCY PURPOSE Community Development Block Grant ANTICIPATED EO 13690 FLOODPLAIN MGMT REQUIREMENT (FFRMS FLOODPLAIN) 8-step decision making Elevate 2 feet above 100-yr BFE Housing Choice Voucher Program HUD-PIH Rental Subsidy Flood insurance (landlord responsibility) No EO 11988 requirements No EO 13690 requirements Section 515 Multi-Family Housing Direct Loans USDA-RD NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE 8-step decision making Floodplain and corresponding elevation requirements not yet specified Section 538 Guaranteed USDA-RD NC / SR Flood insurance 8-step decision making Elevate 1 foot above 100-yr BFE 8-step decision making Floodplain and corresponding elevation requirements not yet specified Rural Rental Housing Program USDA-RD Rental Subsidy Flood insurance No EO 11988 requirements No EO 13690 requirements Section 42 LIHTC Treasury - IRS NC / SR Flood insurance No EO 11988 requirements 12

PROGRAM AGENCY PURPOSE CURRENT EO 11988 FLOODPLAIN MGMT REQUIREMENT (100-YR FLOODPLAIN) ANTICIPATED EO 13690 FLOODPLAIN MGMT REQUIREMENT (FFRMS FLOODPLAIN) No EO 13690 requirements++ Section 142 Bonds Treasury- IRS NC / SR Flood insurance No EO 11988 requirements No EO 13690 requirements++ Table 2: Matrix of current and anticipated floodplain management regulation of HUD, USDA-RD, IRS multifamily housing programs under EO 11988 and EO 13690. (NOTE: The matrix assumes HUD and USDA-RD adopt the freeboard value approach and that a qualified professional has determined the property would fall within the expanded floodplain. This information is based on the best available information at this time. We will not know with certainty how these programs will be affected until the agencies issue their final regulations and policies to implement the EO 13690). *NC / SR = New Construction / Substantial Rehabilitation **BFE = Base Flood Elevation +We anticipate that most properties would be considered noncritical actions; however, it is conceivable that HUD would deem elderly properties critical actions subject to the 3 feet elevation requirement. ++Unless the requirements are tied to other financing sources such as HOME or CDBG Note that all projects, including those not subject to EO 11988, that are constructed in the 100- year floodplain will still have to carry flood insurance under the National Flood Insurance Program (NFIP). In addition to the eight-step decision making (described below) and the requirement to elevate the structure 2 feet above the 100-year base flood elevation, projects occurring within the 100-year floodplain have to carry flood insurance under NFIP. NAHB is especially concerned that many more multifamily projects using Section 221(d)(4) financing for new construction or substantial rehabilitation will trigger federal floodplain management requirements, including requirements to complete the eight-step decision making and elevate structures, as the floodplain definition expands. It is our strong contention that elevating existing structures in the course of substantial rehabilitation is quite infeasible, and HUD should not propose any such requirement. NEW FLOODPLAIN MANAGEMENT REQUIREMENTS FOR MULTIFAMILY BUILDERS Projects in the 100-year floodplain If a new construction or substantial rehabilitation project receives federal funding or HUD multifamily mortgage insurance and takes place in the 100-year floodplain, the project must: 13

Obtain flood insurance under the NFIP; Complete the floodplain management eight-step decision making as described below; Elevate the structure 2 feet above the 100-year base flood elevation (3 feet if the project constitutes a critical action ). The 100-year floodplain will be identified using FEMA FIRMs. However, the limits of the freeboard elevation value across the property will have to be determined by a professional surveyor. Projects outside the 100-year floodplain but within the freeboard value floodplain If a project receives federal funding or HUD multifamily mortgage insurance and occurs outside the 100-year floodplain but within the new expanded floodplain as defined by the freeboard value approach, the project must: Complete the floodplain management eight-step decision making as described below; Elevate the structure 2 feet above the 100-year base flood elevation (3 feet if the project constitutes a critical action ). To complete Step 1 of the eight-step decision making, the builder must determine if the project will impact the new freeboard value defined floodplain. A professional surveyor must make this determination. A survey will have to be done as well to determine the limits of the freeboard elevation value across the property. FLOODPLAIN MANAGEMENT EIGHT-STEP DECISION MAKING PROCESS HUD regulations at 24 CFR 55.20 describe the following for complying with EO 11988: Step 1. Determine whether the proposed action is located in the floodplain. If not, no further compliance is required. If so, continue to Step 2. Step 2. Notify the public at the earliest possible time of a proposal to consider an action in the floodplain, and involve the affected and interested public in the decision making. Notices must be bilingual if the affected public is largely non-english speaking. Notices must be published in the local newspaper. Notices must be sent to federal, state, and local public agencies, organizations, and individuals known to be interested in the proposed action. Notices must state the proposed location and description of the activity, the total number of acres of floodplain involved, the HUD official and phone number to contact 14

for information, and the hours and the HUD office at which a full description of the proposed action may be reviewed. The public is provided a minimum of 15 calendar days to comment on the notice. Step 3. Identify and evaluate practicable alternatives to locating the proposed action in a floodplain. These may include: Locations outside the floodplain; Alternative methods to serve the identical project objective; and A determination not to approve any action. In reviewing practicable alternatives, HUD shall consider feasible technological alternatives, hazard reduction methods and related mitigation costs, and environmental impacts. Step 4. Identify the potential direct and indirect impacts associated with the occupancy or modification of the floodplain. Step 5: Where practicable, design or modify the proposed action to minimize potential adverse impacts within the floodplain and restore and preserve its natural and beneficial values. Step 6. Reevaluate the proposed action to determine: (1) Whether it is still practicable in light of its exposure to flood hazards in the floodplain, the extent to which it will aggravate the current hazards to other floodplains, and its potential to disrupt floodplain values; and (2) Whether alternatives preliminarily rejected at Step 3 are practicable in light of the information gained in Steps 4 and 5. Step 7. If the reevaluation results in a determination that there is no practicable alternative to locating the proposal in the floodplain, publish a final notice that includes: (1) The reasons why the proposal must be located in the floodplain; (2) A list of the alternatives considered; and (3) All mitigation measures to be taken to minimize adverse impacts and to restore and preserve natural and beneficial values. In addition, the public notice procedures of Step 2 shall be followed, and a minimum of 7 calendar days for public comment allowed before approval shall be provided. Step 8. Upon completion of the decision making in Steps 1 through 7, implement the proposed action. There is a continuing responsibility to ensure that the mitigating measures identified in Step 7 are implemented. 15

OUTSTANDING ISSUES: Deals in the pipeline must be grandfathered NAHB is seriously concerned that requirements of the new rule could be imposed on projects where the builder has invested significant dollars that could be lost if the new requirements make the project infeasible. Therefore, NAHB strongly urged HUD to provide a reasonable transition period and grandfathering provisions for projects in when the final rule is published. At this time, NAHB members recommend making the rule effective one year after the date of publication in the Federal Register to give stakeholders sufficient time to prepare. Economic analysis NAHB is developing more specific cost data, including both direct and indirect costs, to share with HUD. Our preliminary estimates suggest compliance with the new FFRMS will increase construction costs for new HUD-insured or assisted multifamily properties by about 5%. This estimate is based on the cost of elevating the properties two feet above BFE. Alternatives to elevating structures NAHB is exploring alternative means of mitigating flood risk in light of climate change. For instance, FEMA recently published a document entitled Reducing Flood Risk to Residential Buildings That Cannot Be Elevated. Methods described in this document may be more practicable alternatives for decreasing flood risk for certain residential buildings. Implementation EO 13690 and the FFRMS through rulemaking As directed by EO 13690, federal agencies will implement the FFRMS through rulemaking. HUD has indicated it will issue a proposed rule this spring, likely in April, with the goal of finalizing the rule in late fall. NAHB continues to provide information to HUD and USDA about our concerns related to the costs and impact of Executive Order 13690 and the FFRMS. We will also comment on agency rules when proposed. Impact on FHA multifamily insurance programs NAHB is assessing the new standard s impact on origination activity in the FHA 221(d)(4) multifamily mortgage insurance program. NAHB has reached out to the Office of Housing to obtain data on the location of these projects and to assess how many of projects could potentially be impacted by the expanded floodplain definition. In the last five years, HUD has insured mortgages for over 800 projects across the country under the 221(d) program (Fig. 4, next page). 16

Figure 4. Location of the more than 800 multifamily projects insured by HUD using the 221(d)(4) program between 2010 and 2015. CONCLUSION NAHB members provide safe and affordable rental housing to low- and moderate-income families across the nation. We are concerned that the cost of the FFRMS and new expanded floodplain area will be significant and impair the ability to provide this affordable housing. HUD and USDA-RD should produce risk-reward analyses to determine whether the cost of flood risk mitigation is reasonable relative to the expected life of the project and the potential reduction in new affordable rental units. 17