WASHINGTON, D.C. – July 2, 2012 – (RealEstateRama) — In an important victory for the National Association of Home Builders (NAHB) and its members who rely on the National Flood Insurance Program (NFIP), Congress has reached an agreement to reauthorize the program through Sept. 30, 2017.
In the past few years, the NFIP has experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain NFIP insurance for a mortgage. In other instances, builders were forced to stop or delay construction on a new home due to the lack of flood insurance approval, resulting in unnecessary delays and job losses.
“NAHB has been working tirelessly to make sure that this vital program, which was set to expire on July 31, was reauthorized for five years to ensure that the federally-backed flood insurance program operates smoothly and without delay, remains efficient and effective in protecting property owners, and creates more stability in the housing market,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.
Congressional negotiators agreed to roll the flood insurance legislation into a larger legislative package that also includes the transportation reauthorization and student loan bill. The legislation was subsequently approved by the Senate and House and is expected to be signed into law shortly by President Obama.
Working with a bipartisan group of senators, NAHB was also successful in removing “residual risk” language from the flood insurance bill, which would have required the mandatory purchase of flood insurance for areas located behind dams or levees.
“NAHB believes the local investment in these flood control structures takes into account the risks, and to mandate the purchase of additional flood insurance policies at a cost to the home owner is simply unfair,” said Rutenberg. “We commend Sens. Mark Pryor (D-Ark.), John Hoeven (R-N.D.), Pat Toomey (R-Pa.), Richard Durbin (D-Ill.) and Bob Casey (D-Pa.) for their efforts in this area.”
The five-year extension of the NFIP ensures that the program will remain available, affordable and financially healthy, said Rutenberg.
Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage.
More than 20,000 communities nationwide participate in the insurance program, which currently covers about 5.6 million policyholders.