It warned that torrential rain brought by Felix could cause rivers to jump their banks.
"We expect it to cause rivers to overflow, mudslides and damage to roads, so we are calling on towns to take preventive measures and evacuate the populations in the most risky areas," said Jose Ramon Salinas, a Honduran civil protection officer.
The worst-hit was Puerto Cabezas, an impoverished northern city of 40,000 where 90 per cent of infrastructure was wrecked, officials said, calling it as "a disaster of major proportions".
Felix provoked fears throughout Central America of a repeat of Hurricane Mitch which killed about 10,000 people across the region in 1998 in floods and mudslides.
Nancy Enriquez, mayor of the coastal community of Bilwi, said: "People are out in the open, they have lost everything, children are exposed to the rain."
Felix followed Hurricane Dean, another Category 5 storm - the most powerful type - which struck last month, killing 27 people in the Caribbean and Mexico.