NAR Helps Secure FEMA Reversal on New Flood Policies During Government Shutdown
Real Estate In-Depth | January 2019
WASHINGTON—In what the National Association of Realtors described as a “critical win for home sales,” the Federal Emergency Management Agency reported on Dec. 28 that it will issue and renew flood insurance policies during the partial shutdown of the federal government, reversing an unexpected and controversial ruling the agency released several days earlier.
“FEMA and the Administration deserve credit for hearing our concerns and acting swiftly to address them,” says NAR President John Smaby. “This new decision means thousands of home sale transactions in communities across the country can go forward without interruption, as Congress intended when it renewed the flood insurance program earlier this week. Our research has shown that 40,000 home sales are lost every month that flood insurance is not available.”
On Dec. 21, Congress passed legislation that extends the National Flood Insurance Program until May 31, 2019.
In an unexpected policy decision, though, FEMA on Dec. 26 said it couldn’t allow insurers to issue and renew federal policies while the partial government shutdown was ongoing. That ruling was unexpected because in past government shutdowns, FEMA continued to operate the program as authorized.
NAR, along with other organizations, including the Property Casualty Insurers Association of America and the Independent Insurance Agents & Brokers of America, urged policy makers to reevaluate the decision. Members of Congress also expressed concern on the issues as well.
“We thank the Administration and Congress for stepping up so quickly to ensure the smooth continuation of flood insurance at a time when market disruption would be extremely hard-felt,” says Shannon McGahn, NAR senior vice president of government affairs.
In reaction to Congress passing the extension of the National Flood Insurance Program until May 31, 2019, NAR President Smaby said, “On behalf of the country’s 1.3 million Realtors, we urge lawmakers to use this time to craft responsible, long-term reauthorization that includes meaningful reforms, as the process of short-term extensions is not sustainable.”
The bill is limited to the flood insurance program; other programs that could be affected by a partial shutdown of the federal government, including FHA mortgage programs, are not part of the legislation.