Stakeholders Urge Long-Term Reauthorization of National Flood Insurance Program

The Mortgage Bankers Association (MBA), along with 14 other trade groups including insurance companies, lenders, and financial institutions, has called on Congress to approve a long-term reauthorization of the National Flood Insurance Program (NFIP). The program, which offers federally backed flood insurance, supports millions of U.S. homeowners against flood risks, the most frequent and costly natural disasters in the country. Stakeholders representing real estate, insurance, lending, and government sectors emphasize the importance of legislative action to ensure stability for those relying on NFIP protection. Since 2017, NFIP has experienced 34 short-term extensions due to legislative gridlock over broader reforms. This has caused repeated disruptions in home sales, lending processes, and policy renewals. A recent government shutdown resulted in the longest lapse of NFIP in nearly ten years, halting new policies and renewals for over a month, and potentially affecting 1,400 home sales per day during the shutdown period. NFIP’s current authorization is set to expire on January 30, 2026. Industry groups highlight that even brief unavailability of the NFIP causes significant interruptions to mortgage and commercial lending workflows, assistance programs for homeowners with repetitive loss properties, and policy renewals. This uncertainty poses risks to market stability beyond the immediate insurance sector. The MBA and its coalition partners are actively advocating for a long-term extension, aiming to secure authorization well beyond the next fiscal year. Their goal is to provide consistent coverage availability and reduce disruptions in the housing finance and insurance markets. Additionally, the exclusion of related housing legislation such as the ROAD to Housing Act from recent congressional bills indicates ongoing legislative challenges. The NFIP is a pivotal component of the U.S. flood risk management infrastructure, and its reauthorization remains a critical agenda for stabilizing insurance and real estate markets. A long-term legislative solution would help mitigate compliance uncertainties for payers and providers involved in flood insurance underwriting and claims processing, contributing to overall market confidence and resilience.