News & Press: The Road Home Newsletter

The Current Status of the National Flood Insurance Program

Tuesday, July 17, 2018  
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July 17, 2018

The Current Status of the National Flood Insurance Program

Dear AHA Members:

Your AHA is working on this important development – but we felt compelled to highlight this for you now. If you are selling your home that is located in a flood area, or you are buying a home in a flood area, the National Flood Insurance Program (NFIP) is set to expire and is expected to lapse on July 31, 2018. It will likely be reauthorized, but perhaps retroactively. The lapse unfortunately could allow enough time to create havoc for your home sale or the closing on your purchase of a home. Here is what is going on:

Of the last 12 times the program needed to be reauthorized, 4 of the reauthorizations by Congress took place after the lapse and had to retroactively reinstate policies. During those lapses, plenty of home purchase or sales on properties in flood areas were delayed/cancelled.  Sometimes the lapse lasted a day, other times up to 2 months.

We expect that this lapse is more likely to be longer than shorter this time:  Because there are partisan differences of opinion on how to address the current $3 billion deficit in the National Flood Insurance Program and because there are other competing Congressional priorities this summer, we expect that it may take time to garner priority attention and support of Congress, even for a short-term extension.

Here’s why it might impact your transaction and what to do:  Federal law requires that for any government-guaranteed loan program (Fannie Mae, Freddie Mac, FHA, VA loans or even loans to be held in bank portfolios that rely on FDIC insurance) a property in a flood zone musthave flood insurance to be legal.  If you have a transaction in process, you can consider private flood insurance, although this is usually prohibitively expensive; or you can attempt to get the closing scheduled on or before July 31st;; or you can attempt to get an insurance certificate issued on or before July 31st in order to complete the closing of the sale or purchase of your home a few days later.  If the NFIP authorization expires and your transaction (on property in a flood zone) has not closed, you will most likely have to wait to close until the NFIP is reinstated.  Check with your lender on what options they may be offering.  The last time the NFIP elapsed for more than a few days (2010), it is estimated that nearly 1,400 homes either did not close or were delayed.

What it means if you already have insurance:  If your property is in a flood zone and you already have flood insurance issued under the NFIP, as long as you continue to make your insurance premium payments you will continue to be insured.  If you have to make a claim during the lapse, payment on the claim may be delayed until the NFIP is reinstated.

Your AHA is engaged with Members of Congress and industry trade organizations to advocate on your behalf and working to avoid or reduce a lapse in availability of NFIP insurance.  We’re also seeking new program parameters that will support an effective and sustainable NFIP for the future.

This issue is real and difficult for many AHA Members. We’re working on your behalf to find a meaningful resolution.

How to Prepare Your Home for Your Vacation

August is vacation time for many, whether it’s for a weekend or for two weeks.  Here are some checklists that will help you enjoy stress-free vacation and come back to a clean, safe, and comfy home! 

  • hgtv.  “13 Steps to Prep Your Home for Vacation”.   Article here.   
  • trov.  “21 Ways to Prepare Your Home for Vacation:  Ultimate Checklist”.   Article here.   
  • Mom With a Prep.  13 Tips to PREPare Your Home for Vacation  Article here.   


It Might be the Dog-Days of Summer – but Bargains are Happening!

Whether you are looking for season-end clearance sales, discounts on hotels to make your vacation more affordable or are preparing for back-to-school, there are many sales and cash back offers available – and they change every day.  Just go to AHA Member Rewards to see the latest.


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