Flood Insurance Update

For those who live in Southdowns or even south Louisiana, buying a home can be made more difficult with the news that your home is in a flood zone.

Several years ago a co-worker purchased a new construction home in Ascension Parish.  Flood insurance was not required at the act of sale.  The very next year, she was notified by her mortgage company that she would be required to add a flood policy to her property.  The flood maps had changed.

In addition, flood insurance premiums increased for those requiring a flood policy after October 1,  2013 because of the Biggert- Waters act of 2012.  This has kept may homes from selling and many buyers frustrated that they no long qualify for the monthly housing note due to the increase in the flood policy premiums on properties current covered  by a flood policy.

There a been a strong push in Washington to correct this issue and address the affordability of premiums. This was the news emailed to Realtors today…..

Homeowner Flood Insurance Affordability Act Passed the House

The United States House of Representatives passed the Homeowners Flood Insurance Affordability Act on Tuesday. Changes were made to the bill text so the next step is to send the legislation back to the Senate for approval and finally to the President’s desk for enactment.

The National Association of REALTORS® (NAR) is urging the Senate to vote on HR 3370 quickly. “As the leading advocate for homeownership and housing issues, NAR applauds this bill, which protects homeowners from the drastic premium increases that went into effect on October 1, 2013, and holds the Federal Emergency Management Agency (FEMA) accountable for flood insurance policy changes.” The bill removes the authority of FEMA to increase rates to unjustified levels at the time of sale. This should stabilize local real estate markets and ensure that both property owners and prospective buyers are treated equally. Data from NAR shows that approximately 40,000 home sales were delayed or canceled due to confusion over flood insurance rates in the four months since the law’s implementation.

This legislation does the following key things:

Reinstates Grandfathering
Caps Annual Rate Increases at 15%
Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters and were charged higher rates
Permanently Removes the Sales Trigger

Michael Hecht, on behalf of the Coalition for Sustainable Flood Insurance, said it well when he said, “Through the leadership of Congressmen Scalise, Cassidy, and Richmond, as well as Congressman Michael Grimm and Financial Services Ranking Member Maxine Waters, we now have legislation that will address the most pressing needs of our coalition, including protecting people who played by rules, and settling real estate markets.” He went on to say “The Coalition also wishes to thank Majority Leader Cantor and House Republican Leadership as well as Leader Pelosi and House Democratic Leadership for their dedication and resolve towards finding a long-term solution to flood insurance. We look forward to again working with our Senate partners to approve this legislation and send it to President Obama’s desk.”

The Louisiana REALTORS® Political Action Committee (LARPAC) in conjunction with the REALTORS® Political Action Committee (RPAC) is the foremost advocate of real estate in government. LARPAC’s goal is to help ensure that our legislators know the importance of real estate issues before voting on bills which may negatively affect our market in Louisiana.

More information regarding this legislation is available here:

H.R. 3370 CBO Report
H.R. 3370 Supporter List

For questions about H.R. 3370 or for more information about how to get involved in LARPAC, contact Norman Morris (norman@larealtors.org).

If you would like to know if your property sits in a flood zone in Southdowns or any other part of metro Baton Rouge, please feel free to give me a call 225.938.8229 or email me at caronstein@kw.com.  I have quick and easy access to the latest flood maps that will help you determine what parts of town (where you may be searching for your next home) will require flood insurance.