The National Flood Insurance Program (NFIP) expired Oct. 1 as partisan gridlock in Washington dragged into a second week, halting new policies and renewals for millions of Americans and real estate transactions in flood-prone areas.

State of Play

• The NFIP’s lapse stems from the broader government shutdown fight, with each party blaming the other for inaction. (E&E News, Oct. 8)

• House Republicans say Democrats have repeatedly blocked their short-term funding bill, which includes a seven-week NFIP extension. Democrats counter that GOP leaders have refused to hold a stand-alone vote on reauthorization while keeping the House largely in recess.

• Speaker Mike Johnson (R-LA) said the NFIP “will be reauthorized in due course,” but called the program’s lapse one of several “leverage points” in the broader negotiations. (E&E News, Oct. 8)

• Senate Majority Leader John Thune (R-SD) on Tuesday cited the NFIP in floor remarks for the first time since the shutdown began, calling it one of several programs Democrats are stalling by opposing the GOP’s plan to reopen the government.

• Meanwhile, FEMA has paused NFIP operations, unable to issue new policies or renewals. The program also cannot ensure payment of claims if major flooding occurs during the shutdown.

Roundtable Advocacy

• The Real Estate Roundtable (RER) continues to urge Congress to enact a sustainable, long-term NFIP reauthorization with appropriate reforms.

• A robust and stable program is essential for residential markets, catastrophe insurance capacity, and the broader economy. (Roundtable Weekly, Sept. 19)

• Lawmakers from both parties have long called for an overhaul and signaled interest in pursuing longer-term reforms to the program.

• The rising cost of insurance premiums due to the growing number of billion-dollar natural disasters reinforces the importance of the NFIP.

• While Congress has typically renewed the NFIP retroactively after past lapses, there is no guarantee this time. A delayed reauthorization could further disrupt real estate markets and delay policy effective dates. (NAHB, Oct. 1)

Housing Impact

• The National Association of Realtors (NAR) estimates the lapse could stall or cancel about 1,400 home sales per day until the NFIP resumes operations. (NYT, Oct. 9)

• “Each day that passes during the shutdown, potential real-life impacts will be felt in America’s housing market, which accounts for nearly 20% of the US economy,” said Shannon McGahn, (EVP and Chief Advocacy Officer, NAR) (Bloomberg, Oct. 9)

• NFIP provides $1.3 trillion in flood insurance to 4.7 million policyholders across 23,000 communities. It underpins nearly 500,000 home sales annually, supports 1 million jobs, and contributes $70 billion to the U.S. economy. (NAR, Oct. 7)

• While some private insurers are expanding their offerings, they still represent only a fraction of the market—and typically charge higher premiums, adding costs for homebuyers. (Bloomberg, Oct. 9)

Congressional leaders have vowed to revisit flood insurance reauthorization once the government restores funding. RER will continue to advocate for a long-term NFIP solution.