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Congress passes two-week extension of National Flood Insurance Program

A pending bill would extend the program through September

Congress passed a stopgap bill on Thursday to extend the National Flood Insurance Program for two weeks, a last-minute rescue to a program that bolsters home values in coastal and low-lying real estate markets. 

The bill will allow new flood insurance policies to be issued and mortgages to go through for homes that require a policy before being funded, depending on location. Another measure is pending that, if passed, would extend the program through September. 

House Democrats secured unanimous consent to pass the two-week extension after several prior attempts were blocked. The Republican-controlled Senate passed the bill last week. The program was scheduled to expire at midnight Friday. If that had happened, thousands of home transactions would have been knocked off-track.

"We’re under unprecedented threat from flooding, and hurricane season is upon us," said Sen. John Kennedy, a Republican from Louisiana. "The American people need Congress to do its job.”

Congress has passed 10 short-term flood insurance extensions since 2017 as Republicans and Democrats negotiate a restructuring of the program. Some of the proposed changes include measures to discourage the construction of homes in flood zones.

The Government Accountability Office has put the NFIP on its "high risk list" because it hasn’t found a sustainable solution to keeping insurance affordable and maintaining the program's solvency. That has led to premium rates that "in many cases do not reflect the full risk of loss and produce insufficient premiums to pay for claims," the GOA said in a statement.

The two-week reprieve comes after violent weather in the midwest caused record flooding in Arkansas, Louisiana, Illinois, Oklahoma and other states. Earlier this year, about two dozen levee systems were breached after torrential rain caused the Missouri River to top its banks and flood parts of Nebraska, Iowa and Missouri.

And more flooding likely is on the way, said Jon Gentile, vice president of the National Association of Professional Insurance Agents

"Hurricane season begins June 1, and several states over the last few weeks have been dealing with disastrous flooding,” Gentile said. “Bringing the NFIP to the brink of lapse is unfair to homeowners who rely on this vital program."

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