The Impact of an Expired National Flood Insurance Program

The Charleston, South Carolina area is a great place to live or have a vacation home.  The weather is great, the beaches are fantastic, golf courses are abundant, there are many historical sites, the architecture is unbelievable, the dining is unbeatable, and the people are the friendliest in the country.  It is because of these reasons that I believe Charleston SC Real Estate is truly unique.  I look forward to helping you with any of your Charleston SC Real Estate needs in Charleston, Berkeley, or Dorchester counties. Today’s article is titled:

The Impact of an Expired National Flood Insurance Program

The National Flood Insurance Program (NFIP) has run out of funding as of May 31, 2010.  As of today, Congress has not acted to extend the funding.

What this means for buyers trying to refinance an existing loan, or purchasing a home in a FEMA designated flood zone is that they cannot obtain flood insurance until the National Flood Insurance Program is again fully funded.  If a buyer is obtaining a mortgage the lender may not approve financing until flood insurance is obtained.  Thereby delaying the closing until flood insurance is obtained.  The inability to obtain flood insurance will put homebuyers across the nation in jeopardy of losing there homebuyer tax credit.  According to current guidelines you must close on, or before June 30, 2010 to qualify for the tax credit.  There has been some effort in congress to get the closing deadline extended but as of this date little progress has been made.  

For buyers who are currently purchasing or trying to refinance a loan located in a flood zone, you have the option to acquire private flood insurance, available through many insurance companies, but it is much more costly. 

As it stands now until Congress passes a bill to fund the National Flood Insurance Program, new policies cannot be written and existing policies cannot be renewed.  Homeowners are being encouraged to jup through the hoops to renew their policy because Congress approval of funding is inevitable.  When the National Flood Insurance Program is funded new policies and renewals will be go into effect retroactively.  If a flood strikes while an owner is waiting for a new policy, or and existing policy to be written a claim will be paid, but not until the National Flood Insurance Program is fully funded.  

I believe every citizen who is affected by a FEMA Designated Flood Zone should contact their Senators and Congressman immediately and urge them to resolve this issue. ACT NOW!!

As always, your thoughts, questions, or comments are greatly appreciated.

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Sincerely,

"Carolina Joe" Idleman
http://www.carolinajoe.com
 

 

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