NFIP Lapse Continues, CSFI Reiterates Need for Reauthorization and Releases Policy Priorities
The National Flood Insurance Program (NFIP) lapsed on September 30, 2025. Until the program is reauthorized by Congress, FEMA can no longer issue new policies or renew existing ones. Halting new and renewal policies affects the real estate market, potentially causing delays or cancellations in home sales. NFIP’s borrowing capacity is lowered, jeopordizing the ability to pay claims. The Congressional Research Service (CRS) elaborates on the impact of a lapse.
In response to the lapse, CSFI urges immediate action by Congress on a short-term reauthorization. Meanwhile, CSFI reiterates need for a long-term reauthorization, thereby reducing risk of future lapses, in a manner that prioritizes sustainability, affordability, and transparency. Pressing priorities include:
-
Require a Peer-Review of the Risk Rating 2.0 Methodology and an Analysis of its Impacts – Congress should mandate an independent technical review performed on an ongoing basis by a team of experts, which could heed insight into and improvements to Risk Rating 2.0.
-
Mandate a Public-Facing Methodology Rate Calculator and a Rating Factor Appeals Process – Congress should mandate that FEMA publish additional data on Risk Rating 2.0’s methodology and rating factors, while providing a calculator that policyholders can publicly access and an appeals process to validate FEMA’s data.
-
Enact a Means-Tested Affordability Program Considering Housing Burden – Congress should authorize an affordability program, which FEMA has proposed to administer, that involves a housing burden to equitably distribute benefits in higher cost of living areas.
-
Study Participation Expansion While Retaining Existing Policyholders – Congress should require a study of strategies to expand NFIP participation while capping single-family primary residential rate hikes on policies in force to a maximum of 9% each year.
-
Forgive NFIP’s Debt or Freeze Interest Payments – Congress should forgive NFIP’s debt, or at the least forgive interest payments over a defined period of time, and invest this amount in risk mitigation.