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President Obama signed into law Friday a five-year reauthorization of the National Flood Insurance Program, which will help keep flood insurance more accessible and affordable in protecting property owners in more than 21,000 communities where flood insurance is required for mortgages. The program now will be extended through Sept. 30, 2017.
The extension will “end the uncertainty of NFIP stopgap measures and shutdowns and will help bring stability to real estate markets,” says Moe Veissi, president of the National Association REALTORS®. NAR has advocated for the long-term reauthorization of NFIP for years.
According to NAR, more than 5.6 million property owners rely on the program for affordable flood insurance.
“Without the NFIP, families and business owners across the U.S. would go without essential flood protection, since the private market cannot guarantee the availability or affordability of flood insurance,” according to an NAR press release. “The NFIP also saves taxpayers money, since it serves as an alternative to expensive federally funded disaster relief for flood victims."
Since September 2008, Congress has only been approving short-term extensions of NFIP, with more than 17 extensions of the program in that time. What’s more, Congress has let the program expire two times since September 2008.
When lawmakers let the program expire, about 1,300 real estate transactions were delayed or canceled each day, according to NAR research. In June 2010, for example, more than 40,000 homes sales alone were delayed or canceled while the program lapsed.
“Available and affordable flood insurance is essential to properly functioning real estate markets, and the certainty of a five-year reauthorization will allow long-term real estate investments that are vital to the U.S. economic recovery,” Veissi says.
The reauthorization, known as the Biggert-Waters Flood Insurance Reform Act of 2012, was approved by Congress as part of a transportation funding bill last week and signed into law by President Obama on Friday.
Source: National Association of REALTORS®