With a federal government shutdown looming, a coalition of twelve organizations representing the housing and insurance industries sent a letter to Congressurging an extension of the National Flood Insurance Program (NFIP), which expires Friday.
“Another repeal of the NFIP will put millions of Americans at risk and disrupt the purchase of flood insurance in more than 22,000 communities across the United States, including those still recovering from devastating storms like Hurricanes Helene and Milton,” the letter said.
The coalition includes the American Land Title Association (ALTA), the Association of Mortgage Bankers (MBA) and the National Association of Home Builders (NAHB).
Since 2017, the authority of the NIV has been extended 31 times and has also been briefly canceled several times. Managed by the Federal Agency for Emergency Management (FEMA), the program was originally established by Congress through the National Flood Insurance Act of 1968.
More than 50 private insurers participating in the NIV operate under a “write your own” program, which allows them to issue flood insurance policies. Financing to cover some claims is borrowed from the Ministry of Finance. The program is available in 22,000 communities across the country, all of which must adopt and enforce rules aimed at reducing flood damage.
The program’s expiration coincides with a possible U.S. government shutdown after a bill backed by newly elected President Donald Trump failed to pass. The legislation was defeated by a vote of 235 to 174, with 38 Republicans voting against it. Lawmakers have until midnight Friday to reach a consensus and avoid a shutdown.
If the NFIP expires, Americans would be unable to purchase new flood insurance policies, although existing policies would remain active until their expiration dates. Without new reporting, affected individuals would have to rely on limited federal disaster assistance, the coalition of trade groups warned.
“Real estate buyers could lose financing or be forced to pay fees to maintain interest rates as NAR estimates that forgeries threaten 1,300 real estate sales every day,” the groups said in the letter. “Some property owners could be subject by their mortgage servicers to lender-placed insurance, which is typically more expensive than borrower-placed insurance, resulting in even more costs for American families.”
In the House of RepresentativesThe letter was addressed to Speaker Mike Johnson and Democratic Leader Hakeem Jeffries. In the Senateit was sent to Majority Leader Charles Schumer and Republican Leader Mitch McConnell.
To ensure greater stability and predictability for this vital program, trade groups urged Congress to pass the NFIP Extension Act of 2024, which has been introduced in both chambers and would extend the program’s authorization until September 30, 2025 .
Since its inception, the NIV has processed a total of 2.6 million claims. More than 21,000 claims were filed in 2023 alone, resulting in $1 billion in payouts. Currently, the NIV provides coverage for 4.6 million properties.
