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Editor’s note: This article has been updated.
Congress passed a stop-gap spending measure just after the midnight deadline Friday, averting a government shutdown and keeping vital housing programs running, including an extension of the National Flood Insurance Program (NFIP). A lapse in the NFIP, which provides necessary insurance coverage for thousands of real estate transactions nationwide, could have impacted as many as 1,300 home sales a day, according to research from the National Association of REALTORS®.
The spending measure keeps the federal government open through March 14 and includes funding for disaster relief and farm aid programs, as well as an extension of NFIP’s authority to write flood insurance. This is the 32nd short-term extension of the NFIP since 2017.
In a statement, NAR President Kevin Sears thanked Congress for continuing to support the NFIP while making it clear the association wants a long-term solution for federal flood insurance. “As the 118th Congress nears its end, NAR looks forward to working with the new Congress to make long-term reauthorization and reform a priority moving forward,” he said. Sears added that “our association is also pleased that this Congress included $12 billion for HUD’s Community Development Block Grant Program directed towards disaster relief. This addition sheds light on the importance of not only the need for new inventory but also the reconstruction of existing infrastructure in devastated areas.”
A government shutdown had appeared likely earlier in the week as negotiations among lawmakers on Capitol Hill broke down, and NAR’s advocacy team was working feverishly behind the scenes to secure an extension of the NFIP. Joe Harris, NAR’s vice president of government advocacy, sent a memo to members Thursday night, saying the association was working around the clock. “NAR is working closely with congressional leaders to secure an on-time extension [of the NFIP], including standalone and other possible legislative vehicles for an extension,” he wrote. “We are also educating members about the importance of extending funding for other housing programs.”
NAR sent a letter to Congress on Wednesday, pointing out that the NFIP had been allowed to lapse several times before with great impact to consumers. “Another lapse of the NFIP will leave millions of Americans at risk and disrupt the purchase of flood insurance in more than 20,000 communities across the United States,” Sears wrote in the letter to Congress.
NAR released a set of FAQs on the impact of an NFIP lapse to the real estate industry, explaining what a lapse means for real estate closings and identifying the range of options for flood insurance during a lapse. The association also created a memo on what a government shutdown means for agents who are REALTORS®, including how a shutdown affects federal housing programs.