The housing market faces a potential disruption as the federal government teeters on the brink of a shutdown, scheduled to begin at 12:01 a.m. on Saturday, March 15. The most immediate impact on the sector will be the suspension of the National Flood Insurance Program (NFIP), a move that could significantly affect property sales.
Approximately 1,300 property sales occur daily for properties that depend on the NFIP. If the program is not reauthorized by March 15, all new home sales and the renewal of insurance policies for homeowners with federally-backed mortgages on properties located in a Special Flood Hazard Area will be delayed.
While the National Association of Home Builders (NAHB) is actively working to extend the NFIP, builders should be aware that even a brief disruption to the program could cause delays – and potentially cancellations – in home sales and multifamily transactions that require federal flood insurance under the NFIP.
