National Flood Insurance Affordability Act

An article from Penna. REALTORS Association:

 

Good news from Washington ... National Flood Insurance Program  The U.S. Senate adopted the House-modified "Homeowner Flood Insurance Affordability Act" late last week and President Obama is expected to sign within the next week. As enacted, the final legislation is dramatically different than the four-year "timeout" version that was originally introduced. Rather than "pausing" rate increases subject to an affordability study, the legislation which ultimately passed, would hit the "reset" button on increases back to before 2012, when rates were not an issue. The legislation:

• Resets premiums back to pre-2012 levels before Biggert-Waters triggered the most disproportionate rate increases relative to property value.
• Restores the "grandfathering" of properties in lower-cost flood areas as flood maps are updated to reflect the property has been built and maintained to NFIP standards.
• Repeals FEMA's authority to raise rates at the time of property sale, i.e., allows buyers to assume the seller's current rates so that the rate stays/transfers with the property, not the owner.
• Refunds premium increases paid by property owners due to the overturned Biggert-Waters reforms since 2012.
• Limit future rate increases required to account for increased flooding risk so no one pays more than 18-25 percent over the previous year's premiums.

NAR says while the final bill goes further by resetting the rate increases, the trade-off is FEMA will have to take more time to rollout the regulations before most can see rate relief. It's anticipated that it could take up to eight to 16 months for FEMA to initiate rate relief but NAR will continue to push for quicker implementation. Patience will be required until everything is in motion. Refunds and rate changes are on the way once the president signs the legislation.