Flood Insurance Changes Affecting Your Listings

The Morning Shot

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I received an email from a real estate friend of mine yesterday about an update on the flood insurance bill brought to congress and how it might affect some of your current property listings. We’d like to thank David for his contribution, and remind everyone that we are here for you, and if you have any ideas or topics you’d like to hear more about please let us know so we can look deeper into it for you and get you a shot about it!

The 21st Century Flood Reform Act is looking unlikely to be finalized by Congress before the National Flood Insurance Program is scheduled to expire. The bill seeks reauthorize the National Flood Insurance Program for five years beyond its September 30th expiration date. The big picture goal of the program is to bring the NFIP back on stronger footing, i.e. they owe the U.S. Treasury $24.6 billion and hope to have it forgiven, provide aid for those unable to afford coverage, improve flood mapping and encourage greater private insurer participation in the market.

Keeping in mind, mortgage lenders require proof of property insurance before lending money at closing, and require proof of flood insurance in particular if the property is located within a FEMA-designated flood zone. If, let’s say, a homebuyer is unable to secure flood insurance due to financial constraints or whatever, their closing would be cancelled or delayed. The state of Florida alone represents 40% of all NFIP policies in the U.S., so if you are a realtor who closes on deals here in Florida this is CRITICALLY important to your business to know!

Florida Realtors President Maria Wells said in an interview that agents should “take precautions if you have pending listings in September that are located in mandatory flood zones. Try to close before September 30th.” While the National Association of Realtors is working directly with lawmakers to help pass a short-term extension of the current program to avoid coverage disruption should the main bill fail to pass Congress, the bottom line is this – if you are selling homes in flood zones, assume flood coverage will expire after Sept. 30th and plan accordingly.

Many of you might be asking yourselves, “how do I know if my listings are in a flood zone?” Two ways for you to get that information. One, type in the following web address:

https://msc.fema.gov/portal/search

Or option #2, give us a call at 561-864-2458 or shoot us an email at [e-mail] and we’d be happy to help identify if any of your properties are in a FEMA designated flood area.

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The views of this blog, “Your Morning Shot” podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage.