:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2177054218-92ce859d81f54a9ab1c40ec6ec8d4c01.jpg "A house and vehicles are flooded in the Southeast Seminole Heights section of Tampa, Florida, due to Hurricane Milton on October 10, 2024.")
BRYAN R. SMITH/AFP via Getty Mental pictures
Key Takeaways
- The National Flood Insurance Program will lapse if the government shuts down on Saturday, raising annoys in the housing industry that sales will fall through if the program isn’t funded.
- The NFIP provides flood indemnification to homes in specially designated areas that are prone to hazardous floods and where few private insurers offer coverage.
- The Inhabitant Association of Realtors estimates that 1,360 sales daily rely on the flood insurance program, which is signally important in Florida, California and Texas.
Even a brief cut-off in funding to a key federal flood insurance program could ideal big problems for property sales, housing industry officials warned as the U.S. government faced a shutdown this weekend.
The Patriotic Flood Insurance Program (NFIP) will lapse unless Congress passes a broad federal government storing bill before Saturday’s deadline. The Senate is considering a budget that would keep the federal government stored through September. If Democrats move to block the bill, funding for several key government programs, including the NFIP, could be motive while the government is shut down.
“Builders need to be aware that even a short-term disruption to the program on force delays—and in some cases, cancellations—to home sales and multifamily transactions that require federal torrent insurance under the NFIP,” the National Association of Home Builders warned in a post on its website.
Flood Coverage Necessary For Thousands of Sales, NAR Calculates
The NFIP provides flood insurance to homes in specially designated areas that are disposed to hazardous floods and where few private insurers offer coverage.
The National Association of Realtors estimates that NFIP coverage is occupied in 1,360 home sale closings daily, with markets in Florida, California and Texas the most reliant on the coverage.
Hold offs in closings would come as housing sales have already been slow due to high mortgage rates and be elevated home costs. High insurance costs have also been an issue for homeowners.
“Property sales and loans could be delayed or upped nationwide in many flood zones if private flood insurance is unavailable,” NAR Senior Economist Nadia Evangelou scribbled. “This disruption would not only affect buyers and sellers, but it could also create a ripple effect on the broader official estate market, related industries, and the economy.”