Category: National Flood Insurance Program (NFIP)

House Committee Passes Bill Extending National Flood Insurance Program for Five Years

Posted on by Trey Jackson

The House Financial Services Committee on June 12 unanimously approved legislation that would reauthorize the National Flood Insurance Program (NFIP) for five years; spur the availability of private flood insurance; reduce costs for lower-income policyholders; and require updated flood zone maps for coverage.  (Wall Street Journal, June 12).  Next, the House of Representatives will consider the measure although the timing of a possible vote is not clear. ( Section-by-Section Committee Bill Summary )    

The NFIP would be reformed and reauthorized for five years under H.R. 3167.

  • The NFIP has operated under a series of temporary extensions since 2017.  On June 6, President Trump signed a disaster relief bill that extended the program until Sept. 30, the end of the fiscal year.  
  • Following negotiations between Committee Chairwoman  Maxine Waters  (D-CA) and Ranking Member Patrick McHenry (R-NC), the House panel approved the flood insurance reauthorization bill ( H.R. 3167 ). (House Financial Services Committee News Releases,  June 5   and  June 10 ) 
  • “The ranking member and I are convinced we can do a lot better than short-term extensions,” Waters said. “So, we are very pleased we put forth a bill today that is supported by both sides.” (CQ, June 12) 
  • The Real Estate Roundtable and 14 other industry groups urged Congress in a  June 12, 2017 comment letter  to reauthorize and reform the NFIP to help protect the nation’s commercial and multifamily business-owners, their properties, residents and the jobs they create from the financial perils of flooding. 
  • Under the current NFIP, commercial property flood insurance limits are very low – $500,000 per building and $500,000 for its contents.  Lenders typically require this base NFIP coverage, and commercial owners must purchase Supplemental Excess Flood Insurance for coverage above the NFIP limits. A niche market of carriers typically provides this type of excess coverage. The Roundtable and its coalition partners support NFIP reauthorization with the inclusion of provisions that permit the “commercial exemption.” 
  • The Roundtable has long advocated for a voluntary exemption for mandatory NFIP coverage if commercial property owners have adequate flood coverage.
  • Sec. 402 of H.R. 3167 – Optional Coverage for Umbrella Policies – addresses commercial properties. 
  • John Smaby, President of the National Association of Realtors, commented on the importance of the legislation: “… including policies that address mapping, mitigation and private flood insurance, and we look forward to move responsible NFIP reforms through the House and Senate in the coming weeks” (NAR, June 13)

    The Roundtable will continue to work with lawmakers and our coalition partners to assist with NFIP reforms and a long-term reauthorization that help protect the nation’s commercial and multifamily business-owners, their properties and residents.

    Hurricane Florence Magnifies Need to Extend and Reform National Flood Insurance Program

    Posted on by Trey Jackson

    As Hurricane Florence made landfall this morning near Wrightsville Beach, NC, the storm’s large size and slow speed are expected to produce severe flooding, affecting millions of individuals who have evacuated affected coastal areas and thousands of businesses in the Carolinas.  (National Hurricane Center, Hurricane Florence)

    As communities in the Carolinas and beyond contend with catastrophic storm surge, rain deluge, high winds and loss of property, Real Estate Roundtable President and CEO Jeffrey DeBoer expressed concern about the disaster and its victims, encouraging those in the industry to participate in relief efforts.

    • Today, President Trump announced more than 3,800 Federal Employees, including more than 1,000 from the Federal Emergency Management Agency (FEMA), are working with State and local partners to respond to Hurricane Florence.  (White House Statement, Sept. 14)
    • In the wake of last year’s Hurricane Harvey disaster in Texas, policymakers in Washington are again expected to appropriate disaster relief this fall and address legislation reforming the National Flood Insurance Program (NFIP), scheduled to expire on Nov. 30. (Roundtable Weekly, Sept. 8, 2017)
    • As communities in the Carolinas and beyond contend with catastrophic storm surge, rain deluge, high winds and loss of property, Real Estate Roundtable President and CEO Jeffrey DeBoer expressed concern about the disaster and its victims, encouraging those in the industry to participate in relief efforts. 
    • DeBoer stated, “Action is needed to help assist families today and help facilitate recovery for the future. For our part, members of The Real Estate Roundtable, and everyone involved in the broader real estate industry, should do what they can to provide immediate assistance.  The National Voluntary Organizations Active in Disaster (NVOAD) lists organizations where you can donate time, money or other resources.” 
    • “The Real Estate Roundtable has also activated our industry public-private information sharing partnership with the federal government (Real Estate Information Sharing and Analysis Center – REISAC) in an effort to provide ongoing industry updates on a range of critical matters arising from Florence’s landfall – such as search and rescue efforts by the National Guard; anticipated flooding in communities as the storm’s impact moves eastward; refuge information provided by the Red Cross; energy disruptions; and phishing scams on social media,” added DeBoer.
    • As legislation moves on Capitol Hill this fall to extend and reform the NFIP, The Roundtable plans to advocate for reforms that will assist housing re-development in flood-prone areas; help protect the nation’s commercial and multifamily business-owners, their properties, and residents; and foster resilient and cost-effective infrastructure.

      President Trump announced more than 3,800 Federal Employees, including more than 1,000 from the Federal Emergency Management Agency (FEMA), are working with State and local partners to respond to Hurricane Florence.  (White House Statement, Sept. 14)

    • The Roundtable has also advocated for a voluntary exemption for mandatory NFIP coverage if commercial property owners have adequate flood coverage.
    • Under the NFIP, commercial property flood insurance limits are very low – $500,000 per building and $500,000 for its contents.  Lenders typically require this base NFIP coverage, and commercial owners must purchase Supplemental Excess Flood Insurance for coverage above the NFIP limits. A niche market of carriers typically provides this type of excess coverage. The Roundtable and its coalition partners support NFIP reauthorization with the inclusion of provisions that permit the “commercial exemption.”
    • The Real Estate Roundtable and 14 other industry groups urged Congress in a June 12, 2017 comment letter to reauthorize and reform the NFIP to help protect the nation’s commercial and multifamily business-owners, their properties, residents, and the jobs they create from the financial perils of flooding.
    • In November 2017, the House passed the 21st Century Flood Reform Act (H.R. 2874), which would reform and reauthorize NFIP for five years. The bill included: funding for flood mitigation assistance; lower flood insurance rates, support for  the private flood insurance market, modernization of flood zone mapping; and flood mitigation practices for homebuilders and land developers.  However, the measure was not been taken up in committee in the Senate. ( Roundtable Weekly, Nov. 17, 2017)

    The Roundtable will continue to work closely with lawmakers and our coalition partners to ensure that the NFIP is renewed prior to its expiration date on Nov. 30, 2018.

    National Flood Insurance Program Extended through Nov. 30

    Posted on by Trey Jackson

    A five-month extension of the National Flood Insurance Program (NFIP) was passed by Congress hours before its scheduled July 31 expiration and signed by President Trump later that day.  The NFIP extension gives the House and Senate additional time to work towards long-term reauthorization.

    If the National Flood Insurance Program had lapsed, the Federal Emergency Management Agency would not have been able to issue new policies, and its borrowing authority would have been reduced to $1 billion from $30.4 billion. This would have had major effects on the real estate markets in coastal areas, where a flood insurance policy is mandatory for obtaining a new mortgage. 
    • If the program had lapsed, the Federal Emergency Management Agency (FEMA) would not have been able to issue new policies, and its borrowing authority would have been reduced to $1 billion from $30.4 billion. This would have had major effects on the real estate markets in coastal areas, where a flood insurance policy is mandatory for obtaining a new mortgage. (BGov, July 31) 
    • On July 25 the House voted 366-52 to pass the National Flood Insurance Program Extension Act of 2018 (S.1182), as amended, and on July 31 the Senate followed suit with a vote of 86-12. The measure reauthorizes FEMA to enter into new contracts for flood insurance and borrow from the Treasury up to specified amounts through Nov. 30, 2018 – the ­official end of the Atlantic hurricane season.   
    • The bill received pushback from Senate and House Republicans who wanted reforms to make the NFIP financially sustainable – after more than a decade of historic storms put the program deeply into debt. (CQ, July 25) 
    • A White House statement last week supported efforts to keep the flood insurance program from expiring, but noted Congress needs to enact long-term changes to ensure the program’s long-term viability. (The White House, July 25) 
    • In November 2017, the House passed long term legislation – the 21st Century Flood Reform Act (H.R. 2874) – that would reform and reauthorize NFIP for five years. The bill included: funding for flood mitigation assistance; lower flood insurance rates, support for  the private flood insurance market, modernization of flood zone mapping; and flood mitigation practices for homebuilders and land developers.  However, the measure was not been taken up in committee in the Senate. (Roundtable Weekly, Nov. 17, 2017) 

    The Roundtable will continue to work with lawmakers and our coalition partners to assist with NFIP reforms and a long-term reauthorization, that would help protect the nation’s commercial and multifamily business-owners, their properties, and residents.