NAHB and House Panel Reach Agreement on Flood Insurance Bill

Filed in Advocacy by on July 20, 2017 10 Comments

NAHB today reached an agreement with leaders of the House Financial Services Committee to craft a viable, long-term flood insurance reauthorization bill that will keep the National Flood Insurance Program (NFIP) fiscally sound and enable home builders to provide safe and affordable housing to consumers.

“NAHB commends House Financial Services Chairman Jeb Hensarling and Housing Subcommittee Chair Sean Duffy for their leadership in working with us to produce a bill that will preserve rate affordability, shore up the NFIP and address the concerns of the housing community,” said NAHB Chairman Granger MacDonald. “With the NFIP set to expire on Sept. 30, we urge the House to pass this bill quickly.”

NAHB and the committee leadership have worked together to provide a five-year reauthorization of the NFIP that:

  • Eliminates a provision that would have ended NFIP coverage of new homes constructed in the 100-year floodplain;
  • Ensures that “grandfathering” will remain available for all policyholders if their risk changes, which will enable home owners to have continued access to affordable flood insurance; and
  • Sustains affordability by raising the annual premium floor for rate hikes from its current 5% level to 6.5% instead of the proposed rate of 8%.

“As a builder who knows firsthand how flood insurance rate increases can hurt home owners, businesses and communities, I am pleased that the House Financial Services Committee has made such important progress on reauthorizing the NFIP,” said Randy Noel, a home builder from LaPlace, La. and NAHB first vice chairman.

“This bill is critical to allow more borrowers to be covered by flood insurance and ensure that we can continue to provide safe and affordable housing in Louisiana and across the nation.”

For more information, contact Jessica Hall at 800-368-5242 x8253.

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Comments (10)

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  1. Ricky Wendel says:

    Great progress for Builders

  2. Was there anything in this regarding the 50% rule?

    • NAHB Now says:

      This legislation does not make any edits to the 50% rule. NAHB has been actively lobbying in opposition of lowering the threshold or any measures that could hurt remodeling activity.

      • Jerry Carter says:

        My point wasn’t the “statement” of the 50% rule but rather the “interpretation” of the 50%.
        I ran in to this a few years ago with a home damaged by fire. The couple was in their late 70’s and the taxable valuation that was used in this instance was set when they turned 65.
        Whether right or wrong this was the value that was used. If they had taken a market value approach we would have been able to be under our 50% valuation and rebuild the home. Instead we took a tractor and demoed the house that they had lived in for over 45 years.
        The reason for not being able to rebuild for this family was that even though the home had never had a water issue we would have been required to raise the floor height by nearly 8′.
        This was not feasible for them to climb stairs in and out of the house as he was in a wheel chair.
        This is how the “interpretation” of the 50% rule can catch families.

  3. KB says:

    The insurance industry as well as other sectors have also worked on bills for flood insurance. This article seems to give the impression that NAHB is solely responsible for the work being done on flood insurance reform, which in my opinion is misleading.

    • NAHB Now says:

      KB, you are correct – there are many sectors working on bills for flood insurance. This post focuses solely on NAHB’s role in working with the House Financial Services Committee leadership to address specific concerns that NAHB had with certain provisions in the bill reauthorizing the National Flood Insurance Program. The three provisions detailed in the post address NAHB’s concerns, and we are pleased that the committee leadership worked with us to reach an agreement. As the post noted, the bill still must pass the House and NAHB continues to work with our partners in other industries to help make this happen.

  4. Rod Hurston says:

    Great work by NAHB and Congressional leaders in crafting changes that help all keep the National Flood program viable…and affordable..

  5. I would like to see the final version of this bill before NAHB gives it’s endorsement. The last re authorization was flawed and no one was willing at first to go back and fix it. After a 2 year battle, NAHB along with a big push from our Realtor friends at NAR, a new bill was passed fixing the problems with the original Bigget-Waters Actl. I hope we are given a chance to review this one early on.

  6. Jerry Carter says:

    This could be the time to further clarify the interpretation of the “value” of the property. There seems to be a potential wide swing in what information is used to determine the “value” that is used for the 50% destroyed rule to kick in.
    It appears that some entities use the assessed values on the tax role. The falicy of this is that if the owners are over 65 their values could have been set several years ago. Others use market value at the time of the loss. Others may use a replacement value or some variation of any of these. The important note on this is that the rule applies to any loss whether by water, wind, or fire if the home is in the flood plain.
    The other reason for establishing a fair and consistent valuation is that homes may be built in areas that are not designated as in the flood plain when the house is built but, may be deemed to be in a flood plain at a later date.
    Some observations for thought and discussion.

  7. Peter Kasnet says:

    The 50% rule is a disaster for a homeowner young or old . In my area it is applied cumulatively based on the tax assessment of the building . So if you need a new roof or other repairs even energy improvements not due in any part to flood it can add up over time to a point that makes it impossible to do any improvements never mind a fire or broken pipe . I am talking about homes that have never had any flood damage but are now in a flood zone . This rule should only be applied in the case of flood damage . It also can adversely affect the value of a home that has over the years been maintained and upgraded to a point that a new owner will not be able to do any improvements with out a total rebuild . It is just not right !

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