On Wednesday, the Federal Emergency Management Agency (FEMA) stated the National Flood Insurance Program (NFIP) cannot be renewed during the partial government shutdown, which is currently in its tenth day and left 800,000 federal workers furloughed or working without pay.
An NFIP extension was initially included in a spending bill that funded the government until December 21, 2018. It lapsed on Saturday, meaning the NFIP is no longer able to sell or renew policies. Existing policies, however, are valid until their respective expiration dates.
Before the shutdown, Congress attempted to pass a bill extending the NFIP until May 31, 2019. FEMA’s ruling, however, nullified the action.
” surprise FEMA ruling jeopardizes tens of thousands of home sales across America, as NAR estimates up to 40,000 closings are disrupted each month that the NFIP cannot issue flood insurance policies. NAR will continue carefully reviewing this ruling and we remain in communication with Congress and FEMA to remedy the situation as quickly as possible.”
The National Association of Home Builders (NAHB) also responded to FEMA’s decision to postpone the NFIP extension.
“The nation’s home builders are deeply disappointed that FEMA has chosen to ignore the will of Congress to keep the National Flood Insurance Program (NFIP) fully funded through May 31, 2019,” said NAHB Chairman Randy Noel in a statement. “By refusing to renew or sell flood insurance policies as a result of the federal shutdown, FEMA is not only thwarting congressional intent, but also hurting countless home owners across the nation who reside in flood-prone areas and rely on the NFIP to protect their properties against the risk of flooding.”
“FEMA’s short-sighted action threatens to wreak havoc in many real estate markets from coast-to-coast at a time when the nation is already struggling through a housing affordability crisis. We strongly urge FEMA to rethink this ill-advised action and abide by the will of Congress by moving to immediately allow new flood insurance policies to be written and renew existing policies for the duration of the government shutdown. A failure to act responsibly will have devastating consequences for the housing market,” added Noel.
This is a developing story. Stay tuned to RISMedia for ongoing updates.
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