Flood Insurance Update
With NAR’s support, Senator Mary Landrieu (D-LA) successfully added a 1-year delay of “grandfathered” flood insurance rates to the Senate Homeland Security Appropriations Bill as approved by committee on July 18. The House-passed version also includes this provision. Next, the full Senate must vote on the measure.
A grandfathered rate is a discount given to a homeowner when the community’s flood risk is increased with a map update, because the home was built and maintained in compliance with the previous standards. These homes are often allowed to keep the lower rate from the older flood map.
These grandfathered as well as other subsidized flood insurance rates are being phased out under the Biggert-Waters Act that extended the National Flood Insurance Program for five years. The amendment would delay the phase-out for properties “grandfathered” under older rates in areas remapped into higher-priced flood zones before Sept. 30, 2014.
The law’s other phase-out provisions – for older second homes and business properties and for homes purchased after July 2012 – will continue to go into effect on Oct. 1, 2013. NAR is working on a longer delay and expanding it to include the other subsidy phase-outs, in addition to grandfathered properties.