Climate change spurs HUD to develop plan
The U.S. Department of Housing and Urban Development announced a plan Thursday to tackle the effects of global warming.
Provisions include factoring in climate risk when underwriting loans, incentivizing the construction of energy-efficient housing and updating grant guidelines that provide states funding to rebuild infrastructure after a major natural disaster. The move is part of a wider strategy led by the White House and 20 other federal agencies more than a month after Hurricane Ida left 95 people dead as it flooded Louisiana, New York and New Jersey.
“HUD is taking an agency-wide approach to prioritize climate resilience because we cannot put America on the path to building a stronger and more sustainable housing infrastructure without addressing the impacts of climate change,” HUD Secretary Marcia Fudge said in a statement.
HUD is working with the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture to integrate climate-related financial risk into underwriting standards and loan terms and conditions.
HUD mortgage financing programs, primarily its insurance programs, enable billions of dollars to fund the purchase, refinancing, construction and rehabilitation of single-family homes and multifamily housing, assisted housing and health care facilities.
Many low-income or first-time homeowners rely on federal financing programs. Federal agencies don’t currently take into account climate risk issues, such as flooding, wildfires or subsidence when underwriting loans.
Though the details are being ironed out, factoring climate risk could affect policies as early as 18 months from now that would protect homeowners and last several years. HUD hopes to incentivize developers through grants and tax credits to build resilient infrastructure that is energy- and water-efficient.
HUD is transforming how the agency gets aid to states through community development block grants after natural disasters, prioritizing funding for rebuilding efforts in communities of color that increase flood resilience and minimize the adverse effects to floodplains and wetlands.