House Approves Another Short-Term Flood Insurance Extension
The House voted Tuesday to extend the National Flood Insurance Program through Sept. 30. The Senate must also approve the measure before May 31—when the NFIP is set to expire—to avoid lapses in government-backed flood insurance policies. “Thanks to REALTORS®, the Senate is well aware of the deadline for flood insurance,” Austin Perez, senior policy representative at the National Association of REALTORS®, said Tuesday at the REALTORS® Legislative Meetings & Trade Expo in Washington, D.C. “There seems to be broad bipartisan agreement not to let the program lapse on May 31.”
The House passed the four-month NFIP extension as a standalone bill but also proposed wrapping it into a larger disaster relief package for the Midwest and Puerto Rico, which have suffered from recent floods and hurricanes. REALTORS® on Capitol Hill this week will urge their Congressional representatives to avoid a lapse of the NFIP while working toward a long-term reauthorization that includes meaningful reforms to the financially beleaguered program, which is billions of dollars in debt. “With that basic message, REALTORS® are well-positioned on a complex issue,” Perez said. “We just need to keep up the pressure for Congress to reauthorize and reform the program long-term.”
NAR estimates that the industry could lose 40,000 home sales per month if the NFIP expires.
The program provides flood insurance to more than 5 million homeowners in 22,000 communities across the country. Federal law requires the purchase of flood insurance for a federally backed mortgage in special flood hazard areas designated by FEMA. Private flood insurance is also available in many high-risk areas, but the NFIP may be the only option for some homeowners.
REALTOR® Mabél Guzmán, a broker with @properties in Chicago, said in Capitol Hill testimony in March that flooding is not exclusively a coastal problem. About half of all floods since 1990 have occurred in inland states, including Kentucky, Indiana, Michigan, Wisconsin, Minnesota, and Montana. Guzmán said more NFIP reforms are necessary to help make the program more sustainable.
NAR advocates for long-term reauthorization of the program in addition to removing federal barriers to a more robust private market for flood insurance. The association supports numerous reforms to the NFIP, including improved flood maps to better identify properties at high risk of flooding, pricing flood insurance closer to the specific flood risk of each individual property, and federal assistance, including grants and low-interest loans for owners to mitigate their properties’ flood risk.
Courtesy REALTOR® Magazine Live
Click to learn more about the National Flood Insurance Program.