National Flood Insurance Program Gets Another Reprieve

Key Takeaways:

– Inman Connect Las Vegas is a conference that aims to shape the future of the real estate industry.
– A $1.2 trillion funding bill passed by the House of Representatives includes an extension of the National Flood Insurance Program.
– The bill passed by a narrow margin and faced objections from some conservative Republicans.
– The bill includes appropriations that achieve $200 billion in spending cuts over 10 years.
– The National Flood Insurance Program is crucial for homeowners in flood-prone areas to obtain mortgage approval.
– The NFIP is in debt and faces challenges in implementing risk-based premium increases.
– The bill ensures the NFIP can continue selling and renewing flood insurance policies.
– The Mortgage Bankers Association commends the extension of the NFIP and advocates for a long-term reauthorization.
– The NFIP was created in 1968 to protect homeowners from flood losses.


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A $1.2 trillion funding bill passed by the House of Representatives to head off a partial government shutdown would extend the National Flood Insurance Program through the end of September and do so retroactively, even if the Senate doesn’t meet a deadline for passing the bill by midnight.

Mortgage Bankers Association President and CEO Bob Broeksmit said the trade group “commends congressional leaders and appropriators for including an extension of the National Flood Insurance Program” in the bill.

“Importantly, that provision was carefully crafted to be retroactive, avoiding any disruption in flood insurance authorities” should the Senate not meet tonight’s statutory deadline, Broeksmit said.

The Further Consolidated Appropriations Act of 2024 passed the House by a whisker Friday, over objections from conservative Republicans including Rep. Marjorie Taylor Greene, who filed a motion to remove Speaker of the House Mike Johnson from his position as votes were being cast.

The motion to suspend the rules and pass the funding bill required a two-thirds majority, or 285 of the 432 members present, to pass. It received 286 votes, with 185 Democrats and 101 Republicans supporting the bill.

More Republicans (112) voted against the bill than supported it, with some complaining that the 1,012-page bill hammered out by negotiators was released just 32 hours before a vote, and contained hundreds of earmarks for members’ pet projects, Politico reported.

Republican backers said the package of appropriations bills achieves $200 billion in spending cuts over 10 years, “strategically increasing defense spending, rescinding wasteful Democrat spending, and making targeted cuts to overfunded non-defense programs.”

In a statement released Thursday, The White House said the bill rejects “extreme spending cuts and harmful riders proposed by House Republicans” while expanding access to affordable child care and supporting early childhood education through Head Start.

According to the National Association of Realtors, if the bill had not passed, the National Flood Insurance Program (NFIP) would not have been able to sell or renew flood insurance policies after 11:59 pm Eastern time on March 22, 2024.

Existing NFIP policies would have remained in effect until their expiration date, and claims would have continued to be paid “as long as FEMA has the funds on hand,” NAR said in a website FAQ.

With a crisis averted for now, Broeksmit said the MBA “will work with policymakers on both sides of the aisle on a long-term reauthorization of this critical program.”

Created in 1968 to help protect homeowners from flood losses and encourage sound land uses, the NFIP collects $4.6 billion in premiums, fees and surcharges from 4.7 million homeowners, providing more than $1.3 trillion in coverage.

Would-be homebuyers who want to buy in flood-prone areas generally cannot be approved for a mortgage without obtaining such coverage, either from the government or from private insurers.

The government’s flood insurance program was intended to be self-sustaining, but many homeowners pay subsidized premiums that have not been sufficient to cover rising claims that have left the NFIP saddled with billions of dollars in debt that often leaves it at the mercy of Congress.

Congress canceled $16 billion in NFIP debt in 2017, but the program owes more than $20.5 billion to the U.S. Treasury, leaving it with less than $10 billion in borrowing authority, the Congressional Research Service reported in January.

The NFIP’s administrator, the Federal Emergency Management Agency (FEMA), is in the process of implementing controversial risk-based premium increases that a number of states are challenging in court.

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Property Chomp's Take:

Have you heard the latest news about the National Flood Insurance Program? The House of Representatives recently passed a $1.2 trillion funding bill to extend the program through the end of September, even if the Senate misses the deadline. This is great news for homeowners in flood-prone areas, as the program provides essential coverage for over 4.7 million homeowners.

The Mortgage Bankers Association President, Bob Broeksmit, commended congressional leaders for including the extension in the bill. He emphasized the importance of avoiding any disruptions in flood insurance authorities, ensuring that policies remain in effect and claims continue to be paid.

The House narrowly passed the funding bill, with both Democrats and Republicans supporting it. Some Republicans raised concerns about the last-minute release of the 1,012-page bill and the inclusion of earmarks for pet projects. However, Republican backers highlighted the $200 billion in spending cuts achieved through the bill.

Without the extension, the National Flood Insurance Program would have been unable to sell or renew policies after March 22, 2024. This would have left many homeowners vulnerable to flood losses and unable to obtain necessary coverage for their properties.

Moving forward, the Mortgage Bankers Association is committed to working with policymakers on a long-term reauthorization of the program. The NFIP plays a crucial role in protecting homeowners and encouraging sound land use practices in flood-prone areas.

As we navigate the complexities of the NFIP and its funding, it is essential to prioritize the needs of homeowners and ensure that they have access to affordable flood insurance. By securing the future of the program, we can protect communities from the devastating impacts of flooding and promote sustainable development practices.

In conclusion, the passage of the funding bill is a significant step towards safeguarding the National Flood Insurance Program and providing peace of mind to homeowners across the country. Let's continue to support efforts to strengthen and sustain this vital program for the benefit of all.