Hear that whoosh? It’s the sound of homeowners in flood-prone areas around the country sighing in relief, albeit cautiously. In late October, Congress drafted legislation calling for a four-year delay of the Biggert-Waters Act, which would have significantly raised flood-insurance premiums.
The act was initially passed last year by lawmakers who called for higher rates – and for more homeowners to be required to buy flood insurance – to keep FEMA fiscally sound and ready for future disasters.
Over time, however, the economics of the law worried many homeowners, lawmakers and real estate professionals. The proposed rate hikes could cost up to $20,000 per year, even on modestly priced homes, says the Tampa Bay Times. Industry observers worried the Biggert-Waters Act would price many owners out of their homes, affect currently listed homes for sale, and slow the housing recovery.
Several days ago, after some discussion, and official statements from the National Association of Realtors, some of the very lawmakers who sponsored the Biggert-Waters legislation now agree it makes sense to postpone the premium increases for four years. In addition, they want FEMA to conduct an affordability study before the premiums go up.
Because the proposal to delay the Biggert-Waters Act has bipartisan support, it’s expected to be passed relatively quickly. And that’s even more reason to be relieved.
If you’re thinking about buying a house, find a local RE/MAX agent who can advise whether flood-prone areas and flood insurance are factors to consider in your house search.