WASHINGTON – On Sept. 30, 2023, at midnight, the National Flood Insurance Program (NFIP) expires, along with a likely shutdown of the federal government if Congress fails to extend the fiscal year budget either by approving a new one or extending the current one temporarily.

Down-to-the-wire, short-term extensions have occurred during earlier potential shutdowns. Given political events happening in Congress this time, however, the shutdown and temporary hiatus of the flood insurance program still appears likely.

If the government does shut down, it pressures disagreeing lawmakers into compromise, but it’s unclear how long that will take. It could be days or weeks or, as some fear, even longer.

Flood insurance challenges

Some buyers’ lenders require NFIP coverage before they can close. Buyers who can secure an NFIP policy this week should be okay for a closing within the next week or so, but a long-term program hiatus could impact closings later in October.

The National Association of Realtors® (NAR) says it’s “making every effort to secure a long-term reauthorization of the program.” In the meantime, it’s created a list of frequently asked questions about what the flood hiatus means for upcoming closings. It also includes several proactive steps clients can take in the meantime.

NAR previously joined a five-member coalition urging Washington lawmakers to avoid a flood insurance shutdown. Their letter to Speaker of the House Kevin McCarthy, House Democratic Leaders Hakeem Jeffries , Senate Majority Leader Charles Schumer and Senate Republican Leader Mitch McConnell is posted online.

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