Homeowners in flood-prone areas can breathe a little easier after the House of Representatives overwhelmingly approved a measure earlier this week to block steep increases in flood insurance premiums.
The Homeowner Flood Insurance Affordability Act grandfathers many properties, protecting them from dramatic future increases, and puts limits on flood insurance hikes. More importantly, the legislation prevents FEMA from increasing premium rates to unjustified levels when a property is sold -- a win-win for homeowners and buyers.
The National Association of Realtors, an advocate for Realtors and consumers, says the House-backed measure is a "responsible and balanced solution to the dramatic flood-insurance rate increases unintentionally triggered by the Biggert-Waters reforms to the National Flood Insurance Program."
NAR argued that the rate increases would hurt property values in flood-prone areas and could derail housing's ongoing recovery. As of January, NAR reported that 40,000 home sales had been delayed or canceled in the four months after the Biggert-Waters law's implementation because of premium increases and confusion over the rates.
The House version of the Affordability Act will go back to the Senate, which passed a similar measure in late January. If it's passed there, the last step would involve the President signing the act into law.
For more information, read a USA Today article and see the full statement from NAR.