NFIP Stop-Gap Just Delays Flood Insurance Fix
December 11, 2017
Congress approved a two-week extension for the National Flood Insurance Program late last week, keeping the program afloat until Dec. 22, but the National Association of REALTORS® continues to push legislators to do more—and fast.
Beyond December, the program may be granted another short-term extension as part of a resolution to keep the government operating. That would give lawmakers more time to pass long-term NFIP reform and reauthorization. The House has already passed a bill that would reauthorize the NFIP for five years, including reforms to the program that NAR supports. The Senate is still working on its version of long-term reauthorization.
The NFIP provides flood insurance coverage where required for federally backed mortgages. The House and Senate continue to debate over proposed reforms to the NFIP, which has faced operating losses in recent years. Any lapse in the program could have dire consequences for the housing market, which depends on the NFIP for mortgages and insurance protection, particularly in high-risk flood areas across 22,000 communities nationwide. For example, when the NFIP expired in 2010, more than 1,300 home sales were disrupted every day as a result, according to NAR research. NAR recently updated its analysis, confirming that expiration of the NFIP would cause 40,000 transactions a month to be delayed or lost, with the largest impacts in Florida, Texas, and California.
NAR has long supported strengthening the NFIP with a robust private market that would offer greater choices and maintain access to flood insurance in all markets. NAR has emphasized that reauthorization should be a long-term endeavor and include meaningful reforms that ensure the program’s viability for the future.
“Preventing a shutdown of the NFIP was a must-do item, so of course we’re pleased Congress took action to get it done,” NAR President Elizabeth Mendenhall said about Congress’ two-week extension. “But stopgap measures won’t offer homeowners any certainty or allow Congress to finish its work to reform the flood insurance program. We hope to see that work continue in the weeks ahead and look forward to meaningful progress on comprehensive legislation.”
Updated: September 18, 2018