On July 9, HUD proposed a rule that would rescind most of a final rule it published in April 2024 (previously covered by InfoBytes here) governing floodplain management and the protection of wetlands, in accordance with Executive Order 14148, “Initial Rescissions of Harmful Executive Orders and Actions.” The 2024 rule had required elevated construction and floodproofing standards for new construction financed through HUD grant or subsidy programs or insured by the FHA in mapped floodplains. The rule introduced a process for determining the extent of the Federal Flood Risk Management Standard floodplain, with a preference for a “climate-informed science approach,” under an executive order that President Obama issued in January 2015. That order was later revoked, reinstated by a 2021 executive order on climate-related financial risk (covered here), and then revoked again by Executive Order 14148 on January 20, 2025.

The proposed rule would generally restore HUD’s floodplain management regulations to their state prior to the 2024 rule while retaining certain flexibilities on floodways, categorical exclusions, and the decisionmaking process, and it would remove a reference to environmental justice from HUD program regulations in accordance with Executive Order 14148. HUD estimates that rescinding the 2024 rule would result in expected annual construction cost savings of $4.5 million to $85 million. HUD stated that if the 2024 rule is not rescinded, the resulting construction costs would likely be passed on to individual homebuyers, particularly harming low-to-moderate income homebuyers using FHA-backed mortgages, and could further disincentivize builders from operating in impacted areas. Comments on the proposal are due by September 8.