Home / Press Room / Press Releases / HUD No. 24-080

HUD No. 24-080
HUD Public Affairs
(202) 708-0685
April 18, 2024

HUD Updates Multifamily Insurance Deductibles to Address Rising Costs of Wind and Storm Coverage

Revisions will reduce costs for owners while continuing to ensure that properties have adequate insurance coverage - a key element of HUD’s work to address insurance costs and ensure communities recover from disaster

WASHINGTON - Today, the U.S. Department of Housing and Urban Development, through the Federal Housing Administration (FHA), updated its policies for wind and named storm insurance coverage required for multifamily properties financed with an FHA-insured mortgage, as part of HUD’s broader work to address rising insurance costs. Insurance costs for multifamily properties have risen significantly in recent years, largely due to the greater frequency and severity of storms resulting from climate change. The updates announced today are designed to provide lenders and property owners greater flexibility in obtaining and negotiating property insurance premiums from insurance carriers so properties can obtain the coverage they need without unduly jeopardizing their financial stability.

“I have traveled around the country, talking to homeowners about how rising housing costs are affecting them and their communities - particularly, the cost of insurance. Today, HUD is taking an additional step to address those very real challenges,” said HUD Acting Secretary Adrianne Todman. “The increased frequency and intensity of extreme weather events have contributed to this steep rise in insurance costs, which is especially difficult for property owners trying to maintain affordable rents. We are working hard to bring down housing costs and increase the resilience of communities.”

Extreme weather events, which are expected to continue to increase due to climate change, have had a devastating impact on communities across the country. HUD’s disaster recovery program has invested almost $100 Billion in vulnerable and at-risk communities to ensure the families and people affected can recover from this catastrophic damage. Prior to today’s announcement, HUD started to address this issue by revising its methodology for calculating the Operating Cost Adjustment Factors (OCAF) for multifamily properties to better account for rising insurance costs. In the coming months, HUD anticipates further work to address the impact of rising insurance costs across the nation.

“Today’s policy change aligns FHA with practices across the industry,” said Julia Gordon, Assistant Secretary for Housing and Federal Housing Commissioner. “It will help enable FHA’s partners to continue to offer the affordable rental housing that is so desperately needed in every part of the country.”

Effective immediately, FHA is increasing the maximum permissible wind or named storm deductible to the greater of $50,000 or five percent of the insurable value per location, up to a maximum amount of $475,000 per occurrence. Previous MAP Guide policy prohibited this deductible from exceeding the greater of $50,000 or one percent of the insurable value for any insured building up to a maximum amount of $250,000.

“Raising the deductible amount provides important flexibility for lenders and property owners to obtain and maintain appropriate property insurance that covers their properties in the event of catastrophic weather damage, while maintaining appropriate safeguards to ensure that properties are adequately insured,” said Ethan Handelman, Deputy Assistant Secretary for Multifamily Housing. “Not only is it required by FHA, but being able to secure property insurance coverage is critical to developing new and maintaining existing affordable and market-rate multifamily rental housing.”

About Wind and Named Storms

Heavy rainfall, high winds and storm surges associated with intense storms have the potential to cause significant damage to property, more so than average seasonal storms that may be historically typical for any given geographical area. Because these stronger storms have the potential to cause significant damage to property, property insurance providers generally define them as “named storms” and assess an increased named storm deductible as a condition of providing coverage in the event of a catastrophic loss.


HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available at www.hud.gov and https://espanol.hud.gov.

You can also follow HUD on Twitter and Facebook or sign up for news alerts on HUD's Email List.

Learn More About HUD's Property Appraisal and Valuation Equity Work