The National Association of Home Builders (NAHB) announced that the National Flood Insurance Program (NFIP) is facing a short-term lapse and are encouraging any home buyers that require federal flood insurance to move any June closings to May 31.
The report states that the NFIP is set to expire at 11:59 p.m. on Friday, May 31. The Senate has approved two bills to extend the program: the first is part of the disaster relief legislative package that would extend the NFIP through Sept. 30, and the second would provide a two-week extension.
Congress is currently out for Memorial Day recess, and the NAHB states it is likely the House will fail a unanimous consent on a voice vote for the two-week extension. Two prior attempts to gain unanimous consent was block by representatives Chip Roy (R-Texas), Thomas Massie (R-KY) and Alex Mooney (R-WV).
Failure to pass an extension could result in a short-term shutdown of the NFIP until Congress returns in June.
The NAHB states that Congress requires all properties with the 100-year floodplain purchase with a federally-backed mortgage to carry flood insurance. A short-term shutdown means insurers and insurance agents cannot sell or renew flood insurance policies back by the program because of lack of government funding. The results could mean new or renewing federal flood insurance policies not be written during the lapse.
The U.S. House of Representatives passed H.R. 2578 earlier in April, which would have extended the NFIP’s authorization to September 30.
“The NFIP plays an important role in disaster preparedness and resiliency by providing flood maps, setting standards for floodplain management, and investing in mitigation for our homes, businesses, and infrastructure. According to the Federal Emergency Management Agency, everyone is at risk of flooding,” said Maxine Waters, Congresswoman Maxine Waters (D-CA) and Chairwoman of the House Financial Services Committee. “That means that this is not just a coastal issue—we all have an interest in ensuring a strong National Flood Insurance Program.