Several associations, including the Mortgage Bankers Association, National Association of Realtors (NAR) and National Association of Home Builders, wrote to Congressional leadership to urge them to extend the National Flood Insurance Program (NFIP) before its Sept. 30 expiration.
The letter states, “Americans deserve certainty and stability in the flood insurance marketplace so that they can protect their homes, businesses and loved ones. Since 2017, the NFIP’s authority has been extended 25 times and allowed to briefly lapse on several occasions. Another lapse of the NFIP will leave millions of Americans at risk and disrupt the purchase of flood insurance in more than 20,000 communities across the United States.
“Not only would Americans be unable to purchase new NFIP policies during a lapse in authorization, but property owners and renters currently insured by the NFIP would be unable to renew their policies,” the associations stated. “Without access to flood insurance, American families must rely on federal disaster aid, which is severely limited, and property buyers could lose financing or be forced to pay fees to hold interest rates, as NAR estimates that lapses threaten 1,300 property sales each day. Some property owners could be subject to force-placed insurance by their mortgage servicers, which is typically more costly than borrower-obtained insurance, resulting in even more cost burdens on American families. The risk of an unnecessary NFIP lapse could further impact affordable housing and create additional challenges for small businesses and must be avoided.
“Therefore, we urge an immediate extension of the NFIP. Extending the NFIP would ensure this vital program does not lapse in the middle of hurricane season or create additional challenges for residential and commercial property owners, buyers, managers, renters, and tenants. We commend the House Financial Services and Senate Banking Committees for continuing to work on longer-term NFIP reauthorization and reform measures and look forward to Congress bringing some stability and predictability to this essential program,” the associations continued.