"The bill will resolve some of the costly and unintended consequences of the Biggert-Waters Flood Insurance Reform Act, including huge premium spikes and impacts on the sale, construction and remodeling of homes," said NAHB chairman Rick Judson, a home builder from Charlotte, N.C.
The bill also contains an amendment by Sen. Roy Blunt (R-Mo.) that is critical to the health of the remodeling industry, according to NAHB officials.
The Homeowner Flood Insurance Affordability Act would:
* Delay insurance rate increases for all primary residences until an affordability study is completed.
* Require that the Federal Emergency Management Agency (FEMA) take into account all local flood-control structures while mapping.
* Allow consumers to appeal FEMA's mapping decisions and to be reimbursed for their appeal expenses.
* Reinstate an exemption in 53 communities nationwide for basements that are built a certain way.
Blunt's amendment also would return the "substantial improvement threshold" that triggers a higher flood insurance rate to the historic 50% level of a structure's fair market value, which is important for many remodelers.
When the threshold was lowered to 30% under the Biggert-Waters Act, it acted as a potential disincentive for homeowners to hire remodelers, as even the simplest of remodeling jobs -- such as installing new appliances or updating bathrooms or kitchens -- could have resulted in many homes reaching the 30% percent threshold and triggering higher premium rates. NAHB estimates that returning the threshold to 50% could preserve as much as $8.5 billion in annual remodeling economic activity.
"These provisions will help prevent undue hardship in the recovering housing market, help current and future policyholders keep their premiums affordable, protect home values and make the National Flood Insurance Program more effective," Judson said. "We urge the House to act on a companion bill soon."