WASHINGTON (October 1, 2010) — President Obama has signed a one-year extension of the National Flood Insurance Program, giving Congress time to make much-needed updates to the programs that would provide fairness and continuity to the NFIP.
The NFIP authority was set to expire on Sept. 30 for the ninth time in two years; Congress has approved eight short-term extensions during this time. The new law, signed last night by President Obama, extends the program until Sept. 30, 2011.
“While this extension will help purchasers close their transactions for the next 12 months, these stop-gap measures have created great uncertainty in many real estate markets. That’s especially true when deadlines near because lenders have refused to lend based on promises and indications of extensions, which paralyze the market for indefinite periods. A long-term extension of five years will bring stability to the markets,” said National Association of REALTORS® President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.
“Now that Congress has given us some breathing room, we need to move ahead with long-term reauthorization reforms,” Golder said. “NAR also strongly supports strengthening the NFIP’s solvency through outreach and education programs that would help raise participation beyond the current 50% of homeowners in federally designated flood areas. The increase in participants would boost funding for the NFIP, help property owners recover from flood losses, and decrease future federal assistance when uninsured properties flood and suffer loss.”
Adding types of coverage for living expenses, business interruption, replacement cost of contents, and updating coverage limits — which haven’t been adjusted since 1994 — would also help increase participation.
NAR also favors extending and fully funding a pilot program to mitigate properties that have repeatedly suffered insured flood losses.
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