The Federal Emergency Management Agency ruled today that the National Flood Insurance Program can’t be renewed during the ongoing government shutdown.
The government shut down on Saturday after Congress and the president failed to pass a new funding bill Friday, and now, six days later, that shutdown continues.
The NFIP was among the things affected by the partial shutdown. The latest National Flood Insurance Program extension was wrapped into the spending bill that funded the government until December 21, 2018, meaning it also expired Saturday. The NFIP can now no longer sell or renew policies, while existing policies will remain in effect until their expiration date.
But Congress sought to rectify this, passing a bill that would extend the NFIP until May 31, 2019. That is, before FEMA ruled against it.
And now, the housing industry is not happy with FEMA’s decision, and is making it known.
“Today’s ruling comes contrary to Congressional intent and is in conflict with FEMA’s decision to allow NFIP operations during the 16-day government shutdown in 2013,” said Shannon McGahn, National Association of Realtors senior vice president of government affairs. “NAR and its 1.3 million members are extremely disappointed by this abrupt and ill-conceived change of course.”
“Last week, Congress passed legislation to fully reauthorize the NFIP through May,” McGahn said. “However, today’s surprise FEMA ruling jeopardizes tens of thousands of home sales across America, as NAR estimates up to 40,000 closings are disrupted each month that the NFIP cannot issue flood insurance policies.”
“NAR will continue carefully reviewing this ruling and we remain in communication with Congress and FEMA to remedy the situation as quickly as possible,” she concluded.
The National Association of Home Builders also expressed strong thoughts on the decision, saying it was “deeply disappointed” and calling the action “short sighted” and “ill advised.”
“The nation's home builders are deeply disappointed that FEMA has chosen to ignore the will of Congress to keep the National Flood Insurance Program fully funded through May 31, 2019,” NAHB Chairman Randy Noel said. “By refusing to renew or sell flood insurance policies as a result of the federal shutdown, FEMA is not only thwarting congressional intent, but also hurting countless home owners across the nation who reside in flood-prone areas and rely on the NFIP to protect their properties against the risk of flooding.”
“FEMA's short-sighted action threatens to wreak havoc in many real estate markets from coast-to-coast at a time when the nation is already struggling through a housing affordability crisis,” Noel said. “We strongly urge FEMA to rethink this ill-advised action and abide by the will of Congress by moving to immediately allow new flood insurance policies to be written and renew existing policies for the duration of the government shutdown. A failure to act responsibly will have devastating consequences for the housing market.”
Published at Thu, 27 Dec 2018 16:17:00 +0000