Participation in the NFIP is voluntary and most communities participate, although not all communities choose to. A community must be a participating community in the NFIP in order to have valid FEMA mapped SFHAs within it. A community must agree to regulate new development in the designated floodplain through a floodplain ordinance to participate in the NFIP. For the purposes of the NFIP, defines community as (1) a political subdivision that has zoning and building code jurisdiction over a particular area having special flood hazards or participating in the NFIP, or (2) a political subdivision of a State or other authority that is designated to develop and administer a mitigation plan by political subdivision. In other words, a community is an entity which has authority to adopt and enforce floodplain management regulations for the areas within its jurisdiction.

The floodplain ordinance must require that development in the designated floodplain be consistent with the intent, standards and criteria set by the NFIP. Communities may adopt ordinances and rules that are more stringent than the requirements in and are encouraged by FEMA to do so. In return for community participation in the NFIP, the property owners in the community are eligible to purchase federal flood insurance for buildings and contents, and FEMA will prepare maps showing the SFHAs to be used by the community, insurance agents, and others. FEMA maintains the list of all within the states, both participating and non-participating.