Is there a minimum or maximum flood insurance deductible that FHA will accept?

FHA follows the guidance regarding deductibles as required by the Biggert-Waters Flood Insurance Reform Act, The Homeowner Flood Insurance Affordability Act and the National Flood Insurance Program (NFIP).

The Homeowner Flood Insurance Affordability Act of 2014 repealed and modified certain provisions of the Biggert-Waters Flood Insurance Reform Act which was enacted in 2012. In addition to several other changes, the law states for residential properties, flood insurance coverage that provides for a loss-deductible for damage to the covered property shall be made available in various amounts, up to and including $10,000. This amount is higher than FHA policy allowed as reflected in Section IX of Mortgagee Letter (ML) 94-7. The maximum deductible under ML 94-7 is no longer in effect. Federal Law supersedes the prior FHA policy in this case.

Additional information regarding the Biggert-Waters Flood Insurance Reform Act, the Homeowner Flood Insurance Affordability Act and the NFIP can be found at on FEMA’s website at https://www.fema.gov/flood-insurance-reform-law

HUD Policy Determination


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-03418