Effective May 1, 2014, all buyers of older properties (“pre-FIRM”) will see a premium rate reduction under the Homeowner Flood Insurance Affordability Act of 2014.
Instead of jumping to “full cost” for flood insurance, buyers will assume the seller’s Oct-2013 rate for a pre-FIRM property.
NAR prevailed upon FEMA to implement this provision seven months early. FEMA also extended the rate relief so all pre-FIRM properties (including the second homes and businesses) will begin paying Oct-2013 rates when they purchase or renew their flood insurance after May 1, including:
- ALL buyers of a pre-FIRM property, not just those whose seller has an existing policy;
- ALL recent owners who apply for a new flood insurance policy on a pre-FIRM property;
- ALL recent owners who reinstate an old pre-FIRM policy that previously lapsed for any reason;
- ALL recent owners who renew a policy on a pre-FIRM property bought or newly insured after the 2012 Biggert-Waters law.
While expediting the rate relief, FEMA must still issue refunds to all those who paid more than their Oct-2013 rate.
NAR will continue working with FEMA and Congress to quickly issue these refunds to anyone overcharged for flood insurance under Biggert-Waters. Read More.
The Problem: Congress provided a 5-year reauthorization of the National Flood Insurance Program (NFIP), but severe implementation problems threaten to undermine real estate transactions where flood insurance is required to obtain a mortgage.
- New NFIP rate structures have caused serious confusion and hardship for property owners.
- The Federal Emergency Management Agency (FEMA) continues to delay and miss deadlines.
- The legally required transition to true risk rates has plagued consumers with increases in rates beyond what anyone imagined possible.
The Solution: A four-year time-out. Congress has legislation in the House, H.R. 3370 and Senate, S. 1610, to delay changes to the NFIP. These bills would:
- prudently defer rate increases until FEMA completes the affordability study mandated by law
- create a system for targeted rate relief
- establish an office of the Advocate for flood insurance rate and mapping concerns.
Please take action today and tell your Member of Congress that NAR supports the “Homeowner Flood Insurance Affordability Act.”
NAR is urging Congress to support the Homeowner Flood Insurance Affordability Act (S. 1610 and H.R. 3370), a bipartisan measure that calls for a four-year hold on rate implementation until FEMA completes an affordability study and proposes regulatory solutions. The bill’s delay would apply to any property that is grandfathered or purchased after July 2012, including second homes and commercial properties. The other property owners will still see any rate increases capped at 20-25 percent a year. The bill would also create a Flood Insurance Advocate within FEMA to investigate and assist property owners with verifying the accuracy of flood insurance rate quotes. Read More.
Congress passed and sent to President Obama a 60-day extension of the National Flood Insurance Program (NFIP) yesterday, which was set to expire today. The legislation gives lawmakers breathing room to look at a long-term extension and reform of the program, which NAR strongly supports. Read More.
Later today the United States Senate is expected to pass a 60-day extension of the NFIP. This extension will avoid a lapse in the program when the current authorization expires on May 31, 2012. A lapse would have affected thousands of real estate closings across the nation. While this extension is a positive development and will ensure program continuity it is not the long-term solution that NAR has been advocating.
NAR has been firmly committed to working with Congress on passing a 5-year National Flood Insurance Program reauthorization and reform bill. That bill, H.R.1309 the Flood Insurance Reform Act of 2011, has passed the House of Representatives and awaiting action in the United States Senate. Despite media reports that are indicating “progress” in the Senate on passing the reauthorization and reform bill, there a number of legislative hurdles that remain. Read More.
The Senate voted on legislation last week for another short-term extension to the National Flood Insurance Program through May 31, 2012. This could signal the end of congressional efforts for the year to work out House and Senate differences over a 5-year NFIP reform bill, marking the fourth time in as many months that Congress has kicked the can down the road. And making it more difficult for the housing market to get back on its feet.
The latest flood program extension expires Friday, Dec. 16, so the House and Senate have to come to terms on at least a short-term extension this week or it’ll lapse. Read More.