National Flood Insurance Program Could Lapse on March 15

With the federal government possibly heading to a shutdown at 12:01 a.m. on Saturday, March 15, the most immediate impact on the housing sector will be a lapse of the National Flood Insurance Program (NFIP), which could have widespread impacts on property sales.

There are an estimated 1,300 sales that occur each day for properties that rely on the NFIP. A failure to reauthorize the NFIP as of March 15 will delay all new home sales and insurance renewals for property owners who have federally backed mortgages for homes or properties that lie in a Special Flood Hazard Area.

While NAHB continues to aggressively pursue all avenues to extend the NFIP, builders need to be aware that even a short-term disruption to the program will force delays — and in some cases, cancellations — to home sales and multifamily transactions that require federal flood insurance under the NFIP.