As part of yet another short-term federal spending deal, the National Flood Insurance Program (NFIP) was reauthorized through March 23, 2018. While relieved that a lapse in NFIP was avoided, NMHC/NAA are once again urging Congressional leaders to take swift action to advance a long-term reauthorization package that would provide much-needed market certainty. Without the NFIP in place many multifamily firms would not be able to secure the flood insurance coverage required to close or refinance loans with any federal involvement, such as FHA- or GSE-backed multifamily mortgages.
NMHC/NAA have worked aggressively to educate policymakers about the unique and important role the NFIP plays in the multifamily industry and have called for significant reforms to the program. In November 2017, with the support of NMHC/NAA, the House of Representatives passed a five-year reauthorization bill that included many of these reforms. As the Senate Banking Committee continues to try and reach a compromise on their own reauthorization vehicle, NMHC/NAA have urged leaders to ensure that any legislative package include the following sensible reforms for commercial and multifamily property owners:
- Provides flexibility for multifamily owners to secure coverage in the private flood insurance market where that option exists instead of being bound by the limitations of the NFIP.
- Expands the NFIP to include Business Interruption coverage for rental properties.
- Allows for NFIP umbrella coverage for owners who own several multifamily properties or garden style communities.
- Provides Replacement Cost Value (RCV) instead of Actual Cost Value (ACV) to damaged apartment properties.
- Increases access to existing FEMA flood mitigation funding and programs for apartment communities.
Without a long-term reauthorization and these programmatic reforms, the apartment industry’s ability to provide secure housing for many of the 39 million Americans who live in apartment communities will be compromised.