HUD Mortgagee Letter 2022-18 — Acceptance of Private Flood Insurance for FHA-Insured Mortgages

hud-ml-2022-18

HUD ML 2022-18 updates Handbook 4000.1 (and Handbook 4235.1 REV-1 for HECMs) to permit Borrowers to satisfy the FHA mandatory Flood Insurance purchase requirement with a Private Flood Insurance (PFI) policy meeting specified FHA requirements, in lieu of a National Flood Insurance Program (NFIP) policy.

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source:
  type: regulation
  id: hud-ml-2022-18
  authority: HUD Mortgagee Letter 2022-18 — Acceptance of Private Flood Insurance for FHA-Insured Mortgages
  description: |
    HUD ML 2022-18 updates Handbook 4000.1 (and Handbook 4235.1 REV-1 for
    HECMs) to permit Borrowers to satisfy the FHA mandatory Flood Insurance
    purchase requirement with a Private Flood Insurance (PFI) policy meeting
    specified FHA requirements, in lieu of a National Flood Insurance Program
    (NFIP) policy.
obligations:
  - id: hud-ml-2022-18-effective-date
    canonical_id: hud-ml-2022-18-effective-date
    section: HUD ML 2022-18 — Effective Date
    description: |
      [LENDER] must implement the provisions of HUD ML 2022-18, which permit
      Acceptance of Private Flood Insurance for FHA-Insured Mortgages, effective
      December 21, 2022.
    type: do
    audit_question: For every FHA-insured Mortgage closed on or after December 21, 2022 where the Borrower elects Private Flood Insurance in lieu of NFIP coverage, can [LENDER] demonstrate that the ML 2022-18 PFI acceptance and verification procedures were applied?
    program_review: Does the program account for the PFI applicability trigger — applying the ML 2022-18 Private Flood Insurance acceptance/verification procedures for loans closed on or after December 21, 2022 where the Borrower elects PFI in lieu of NFIP?
    file_review: Spot-check post-12/21/2022 PFI-elected files; confirm the PFI acceptance/verification procedures were applied.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - origination
      - servicing
      - flood-insurance
      - effective-date
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-18 — Effective Date
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-18hsgml.pdf
      snapshot_id: 0a4b11f9335abf02
      fetched_at: '2026-05-22T19:56:08Z'
      content_hash: sha256:0e0d512a435b69bd4497560b62d41869e81b8ca8131f0d7fa4b0762fdaa0a6e4
      paragraph_quote: |-
        The provisions of this Mortgagee Letter are effective on December 21, 
        2022.
      drafter_attestation: |
        Copied verbatim from snapshot 0a4b11f9335abf02 (content.txt) at
        2026-05-22T20:00Z. Substring is the Effective Date trigger of
        ML 2022-18.
    promoted_at: '2026-05-22T20:56:06+00:00'
    promoted_from: hud-ml-2022-18-roundb-v1.yaml
  - id: hud-ml-2022-18-flood-insurance-required-in-sfha
    canonical_id: hud-ml-2022-18-flood-insurance-required-in-sfha
    section: HUD ML 2022-18 — Eligible Properties and Required Flood Insurance Coverage (II.A.1.b.iv(A)(1)(a)(ii))
    description: |
      For an FHA-insured Mortgage where the property improvements are located in
      a FEMA-designated Special Flood Hazard Area (SFHA) and NFIP insurance is
      available in that community, [LENDER] must ensure the Borrower obtains
      and maintains Flood Insurance (NFIP or qualifying Private Flood Insurance).
    type: do
    audit_question: For every FHA-insured Mortgage on a Property with improvements in an SFHA where NFIP insurance is available, can [LENDER] demonstrate that the Borrower obtained and continues to maintain Flood Insurance (NFIP or qualifying PFI) for the life of the Mortgage?
    program_review: Does the program account for the SFHA condition — ensuring the Borrower obtains and maintains Flood Insurance (NFIP or qualifying PFI) where improvements are in an SFHA and NFIP is available?
    file_review: Spot-check SFHA files where NFIP is available; confirm Flood Insurance was obtained at closing and is maintained for the life of the Mortgage.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - origination
      - servicing
      - flood-insurance
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-18 — II.A.1.b.iv(A)(1)(a)(ii)(A)
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-18hsgml.pdf
      snapshot_id: 0a4b11f9335abf02
      fetched_at: '2026-05-22T19:56:08Z'
      content_hash: sha256:0e0d512a435b69bd4497560b62d41869e81b8ca8131f0d7fa4b0762fdaa0a6e4
      paragraph_quote: |-
        If the property improvements (dwelling and related 
        structures/equipment essential to the value of the Property 
        and subject to flood damage) are located in an area 
        designated by FEMA as an SFHA and NFIP insurance is 
        available in that community, the Mortgagee must ensure the 
        Borrower obtains and maintains Flood Insurance.
      drafter_attestation: |
        Copied verbatim from snapshot 0a4b11f9335abf02 (content.txt) at
        2026-05-22T20:00Z. Substring is the eligible-properties Flood
        Insurance requirement incorporated into Handbook 4000.1
        II.A.1.b.iv(A)(1)(a)(ii)(A) by ML 2022-18.
    promoted_at: '2026-05-22T20:56:06+00:00'
    promoted_from: hud-ml-2022-18-roundb-v1.yaml
  - id: hud-ml-2022-18-pfi-requirements
    canonical_id: hud-ml-2022-18-pfi-requirements
    section: HUD ML 2022-18 — Requirements for PFI (II.A.1.b.iv(A)(1)(a)(ii)(C))
    description: |
      If the Borrower purchases a Private Flood Insurance (PFI) policy in lieu
      of an NFIP policy, [LENDER] must ensure the PFI policy meets the FHA
      requirements specified in Handbook 4000.1 II.A.1.b.iv(A)(1)(a)(ii)(C),
      including state licensure of the insurer, coverage at least as broad as
      NFIP, deductibles no higher than NFIP, 45-Day pre-cancellation notice,
      NFIP availability disclosure, mortgage interest clause, one-year suit
      limitation, and NFIP-equivalent cancellation provisions.
    type: do
    audit_question: For every FHA-insured Mortgage where the Borrower obtained Private Flood Insurance in lieu of NFIP, can [LENDER] evidence that the PFI policy was verified to meet each of the FHA PFI requirements in Handbook 4000.1 II.A.1.b.iv(A)(1)(a)(ii)(C)?
    program_review: Do the P&Ps ensure any PFI policy elected in lieu of NFIP is verified against each FHA PFI requirement (insurer state licensure, coverage at least as broad as NFIP, deductibles no higher, 45-Day pre-cancellation notice, NFIP-availability disclosure, mortgage-interest clause, one-year suit limitation, NFIP-equivalent cancellation)?
    file_review: Pull PFI-elected files; confirm the PFI policy was verified to meet each FHA PFI requirement at Handbook 4000.1 II.A.1.b.iv(A)(1)(a)(ii)(C).
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: default_servicing_analyst
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - origination
      - servicing
      - flood-insurance
      - private-flood-insurance
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-18 — II.A.1.b.iv(A)(1)(a)(ii)(C)
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-18hsgml.pdf
      snapshot_id: 0a4b11f9335abf02
      fetched_at: '2026-05-22T19:56:08Z'
      content_hash: sha256:0e0d512a435b69bd4497560b62d41869e81b8ca8131f0d7fa4b0762fdaa0a6e4
      paragraph_quote: |-
        If the Borrower purchases a PFI policy in lieu of an NFIP 
        policy, the Mortgagee must ensure the PFI policy meets the 
        following requirements:
      drafter_attestation: |
        Copied verbatim from snapshot 0a4b11f9335abf02 (content.txt) at
        2026-05-22T20:00Z. Substring is the PFI verification standard
        headline incorporated into Handbook 4000.1
        II.A.1.b.iv(A)(1)(a)(ii)(C) by ML 2022-18; the eight enumerated
        requirements are summarized in the description.
    promoted_at: '2026-05-22T20:56:06+00:00'
    promoted_from: hud-ml-2022-18-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T20:56:06+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2022-18-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Mortgagee Letter 2022-18 — Acceptance of Private Flood Insurance for FHA-Insured Mortgages — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD ML 2022-18 — Effective Date

The provisions of this Mortgagee Letter are effective on December 21, 2022.

Source: HUD ML 2022-18 — Effective Date · source URL · snapshot 0a4b11f9335abf02

HUD ML 2022-18 — Eligible Properties and Required Flood Insurance Coverage (II.A.1.b.iv(A)(1)(a)(ii))

If the property improvements (dwelling and related structures/equipment essential to the value of the Property and subject to flood damage) are located in an area designated by FEMA as an SFHA and NFIP insurance is available in that community, the Mortgagee must ensure the Borrower obtains and maintains Flood Insurance.

Source: HUD ML 2022-18 — II.A.1.b.iv(A)(1)(a)(ii)(A) · source URL · snapshot 0a4b11f9335abf02

HUD ML 2022-18 — Requirements for PFI (II.A.1.b.iv(A)(1)(a)(ii)(C))

If the Borrower purchases a PFI policy in lieu of an NFIP policy, the Mortgagee must ensure the PFI policy meets the following requirements:

Source: HUD ML 2022-18 — II.A.1.b.iv(A)(1)(a)(ii)(C) · source URL · snapshot 0a4b11f9335abf02