From National Association of Home Builders
The National Association of Home Builders is continuing its efforts to delay massive rate increases under the National Flood Insurance Program, which has become subject to actuarial-based rates by the Biggert-Waters Flood Insurance Act of 2012 one year after its enactment.
According to the NAHB, the stakes could not be higher as some NAHB members have already seen the rates on their own homes soar by several thousand dollars.
Buildings constructed before issuance of flood maps, generally in the mid-1970s, are known as pre-FIRM properties.
Under the Biggert-Waters Act, any pre-FIRM or grandfathered properties that are sold will immediately shift to a full-rate risk. As a result, all pre-FIRM policyholders saw their premiums jump by 25 percent of the full-risk rate annually for the next four years starting on October 1.
Because the NFIP mandates all federally backed mortgages located within the Special Flood Hazard Areas be covered by flood insurance, NAHB is also concerned that many prospective home buyers could be prevented from qualifying for a mortgage under normal underwriting standards.
U.S. Sen. Bill Nelson (D-Florida) has proposed a delay in the rate increases but the measure it hung up in the partisan debate over the government shutdown and funding of Obamacare. Speaking to Realtors last week in Tampa, Florida Gov. Rick Scott predicted dire consequences for the Florida real estate industry is the flood insurance rate issue is not resolved quickly.