In an 86-12 vote on Tuesday, the Senate granted an extension for the National Flood Insurance Policy (NFIP), which provides flood insurance for nearly five million homeowners and business owners. The House voted in July to keep the program operating; it was set to expire at 11:59 p.m. on the day of the Senate vote.
The NFIP program, currently backed by taxpayers, is over $20 billion in debt. According to a statement by White House Press Secretary Sarah Huckabee Sanders, the program cannot handle a “catastrophic” loss—a concern during this year’s hurricane season, which could bring costly claims in the case of a powerful storm. Lawmakers have called for reform to lessen taxpayer burden and possibly raise rates for high-risk properties.
The National Association of REALTORS® (NAR) has been a strong proponent of comprehensive NFIP reform.
“We applaud lawmakers for taking this needed action to prevent disruptions to closings in thousands of communities across the country,” said NAR President Elizabeth Mendenhall in a statement. “Although the National Flood Insurance Program will be extended through November 30 when signed into law, the NFIP is in desperate need of reforms that will make it solvent and sustainable in the long term. The National Association of REALTORS® will continue fighting for these reforms as the next NFIP reauthorization discussions loom later this year.”
” strongly supports both a long-term reauthorization of the program and necessary reforms that will make the NFIP more sustainable, while also balancing concerns over availability and affordability,” said Rob Nichols, president and CEO of the American Bankers Association (ABA), in a statement.
While bills amending the program—such as the 21st Century Flood Reform Act and the Flood Insurance Market Parity and Modernization Act—have been introduced, the Administration has not yet taken action to adopt a new framework. This is the seventh short-term extension in less than a year, and the 42nd renewal since 1998, according to multiple sources.
In another four months, Congress will need to either grant another extension, implement reform or risk a lapse, which would keep the Federal Emergency Management Agency (FEMA) from issuing new policies, and could prevent the sale of homes in flood-prone areas. Additionally, FEMA could face challenges in paying the claims of existing policyholders in the case of a major disaster.
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.
