NFIP Authorization Lapse and Reauthorization
Update: The Senate passed H.R. 4213 on Wednesday, March 10th. The bill would extend the NFIP through December 31, 2010. The bill now moves back to the House.
Previous Update: After expiring for two days (March 1 and 2), the NFIP has been reauthorized until March 28th. The Senate finally passed a package of extensions of programs expiring on February 28th, the NFIP among them, H.R. 4691.
An amendment restoring NFIP authority for the two lapsed days was accepted on a bill currently under consideration on the Senate floor (H.R. 4213). That bill also includes a further NFIP extension to December 31, 2010. The bill was on the floor March 4 and 5 and is scheduled for continued consideration the week of March 8. Although the base form of the bill has already passed the House, Senate changes would have to be accepted by the House.
Original Report
Congressional authorization of the National Flood Insurance Program (NFIP) lapsed effective 12:00am March 1, 2010.
This means that until Congress approves reauthorization, new NFIP policies will not be issued or renewed, claims submitted for damages incurred after 2/28/10 will not be paid, and increased coverage requests will not be processed.
This has huge implications on the lending industry and home mortgage/building industry. New NFIP flood insurance policies cannot be issued without congress’ reauthorization of the NFIP. Real estate transactions for properties in the Special Flood Hazard Area (SFHA) or areas where the lender requires NFIP flood insurance to close the loan will not go through.