NAHB: Flood insurance reforms will impact new home affordability

One of the proposals to reform the National Flood Insurance Program has been criticized by the chairman of the National Association of Home Builders

NAHB: Flood insurance reforms will impact new home affordability
One of the proposals to reform the National Flood Insurance Program has been criticized by the chairman of the National Association of Home Builders.

Granger Macdonald says the while the NAHB supports reforms to NFIP to ensure the program is fiscally sound at affordable rates, there is a risk to the affordability of new homes.

“We strongly oppose the new proposal by OMB Director Mulvaney to phase out new NFIP policies for newly-constructed homes,” said MacDonald. “It would simply prevent home builders from being able to provide safe and affordable housing to consumers. By creating uncertainty in the housing market, this proposal would also harm local communities and impair economic growth.”

He added that new homes are built to more stringent safety standards and are generally more resilient in flooding disasters than older housing stock; and that new construction policyholders pay full-risk rates so already put more in to NFIP than they take out in claims.

“Why does OMB needlessly propose to penalize new construction? It would only hurt the fiscal soundness of the NFIP and fail to ease taxpayer burdens,” concluded MacDonald.

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