As the House and Senate continue their work to reauthorize the National Flood Insurance Program, the countdown to the program’s expiration continues as well.
On September 30, the Federal Emergency Management Administration loses its authorization to write new flood insurance policies or renew existing policies for its customers. That means homeowners could potentially find their most important asset unprotected, while homebuyers may find themselves unable to get a mortgage at all.
It’s a scenario that’s played out before. Federally regulated or insured lenders must require flood insurance for mortgages on properties where flood risks are high, meaning some of the most common mortgage options are off the table without it. But, in many of those same areas, private flood insurance is either hard to come by or non-existent. That means without the NFIP, homebuyers may simply find themselves out of luck.
When the NFIP expired in 2010, the National Association of Realtors® estimated that for every month without it, 40,000 home buying and selling transactions would suffer.
With this in mind, Congress is hard at work to reauthorize the program. The House Financial Services Committee recently announced significant breakthroughs on its legislation to reauthorize the program, winning support from NAR for their efforts, while the Senate Banking Committee recently unveiled draft legislation for mark up in the coming weeks.
NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties, said House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Housing and Insurance Subcommittee Chairman Sean Duffy (R-Wis.) “deserve high praise for working with Realtors®” to strike a deal.
But with only two months to reauthorize the program, Realtors® remain concerned about what expiration means for their business, their clients, and homeownership. Brown encouraged lawmakers to continue work on legislation that would reauthorize the program.
“The September 30 reauthorization deadline still looms in front of us, and Realtors® are eager to see this legislation progress quickly,” said Brown. “Leaders on both sides of the aisle are well aware that this issue touches 22,000 communities – in every state, both coastal and inland. We’re grateful for the committee’s support and look forward to their continued efforts on behalf of homeowners.”