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This rule amends Federal Housing Administration (FHA) regulations to allow mortgagors the option to purchase private flood insurance on FHA-insured mortgages for properties located in Special Flood Hazard Areas in satisfaction of the mandatory purchase requirement under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.).  Acceptance of private flood insurance would benefit borrowers who want FHA-insured mortgages by providing them consumer choice, including the opportunity to obtain private flood insurance policies that may be more affordable than NFIP policies. Current FHA regulations do not allow private flood insurance as an option and require mortgagors to obtain and maintain NFIP flood insurance for the duration of the mortgage, to the extent NFIP is available. Overall, this rule would reduce the regulatory restrictions on flood insurance for FHA-insured loans.