The Biggert-Waters Flood Insurance Reform Act of 2012 was passed as part of a transportation funding bill and signed into law by the president. The legislation extends NFIP authority through Sept. 30, 2017.
"As the nation's leading advocate for homeownership and housing issues, we are pleased that Congress has approved a long-term reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country," said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami.
"Realtors have been advocating a long-term reauthorization of the NFIP for years. The five-year reauthorization will end the uncertainty of NFIP stopgap extensions and shutdowns and will help bring stability to real estate markets," Veissi added.
NAR has long supported the NFIP, which protects property owners in more than 21,000 communities where flood insurance is required for mortgages. More than 5.6 million property owners rely on the program against flood-related disasters, which claimed more lives and property than any other natural disaster in the U.S. over the past century.
In fact, according to the NAR, floods are the most common natural disaster in the country. Since 1990, floods have been declared in every state, along rivers and anywhere rain falls or snow melts.
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, the NAR said, adding that it also saves taxpayers money, since it serves as an alternative to expensive federally funded disaster relief for flood victims.
For some time now, Congress has been approving short-term extensions of the NFIP authority to issue flood insurance policies. Since September 2008 there have been more than 17 extensions, and authority has been allowed to expire two times, delaying or canceling 1,300 real estate transactions each day of the lapse, according to NAR research. During the June 2010 lapse, NAR survey data estimated that more than 40,000 home sales were delayed or canceled, which undermined home buyer and investor confidence.
"Realtors praise Congress for its bipartisan leadership on this issue and thank Reps. Spencer Bachus (R-Ala.), Judy Biggert (R-Ill.), Barney Frank (D-Mass.), and Maxine Waters (D-Calif.); as well as Senators Tim Johnson (D-S.D.), Richard Shelby (R-Ala.), Jon Tester (D-Mont.) and David Vitter (R-La.) for their efforts," Veissi said.
"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," he added.