Authorization for National Flood Insurance Program Lapses Amid Shutdown
Oct 06, 2025
By Noah Patton, NLIHC Director of Disaster Recovery
The authorization for the largest residential flood insurance program in the country, the FEMA-administered National Flood Insurance Program (NFIP), lapsed on September 30, freezing the program amid the ongoing federal government shutdown. As a result, homeowners and renters with flood policies or in flood-prone areas will be unable to renew or take on new policies under the program.
The NFIP provides subsidized flood insurance to areas of higher flood risk where private insurance is either unavailable or is financially untenable. The program must be periodically reauthorized, with the last long-term reauthorization occurring in 2012. Congress has passed short-term reauthorization measures 33 separate times since 2017. Despite these bipartisan efforts, derailed discussions over a federal spending bill meant that a reauthorization measure could not be passed before the September 30 deadline.
The lapse of the program means that individuals with expired policies will be unable to renew or increase coverage. Individuals looking to purchase insurance policies through NFIP will be unable to do so until the program is reauthorized. The program does have funding available for now, so claims from current policyholders will still be paid out until the remaining funds are expended.
Not only could this significantly impact policyholders’ ability to fully insure homes in flood-prone areas, but it will also have an impact on the real estate market. Lenders are prohibited from issuing government-backed mortgages for properties in FEMA-designated Special Flood Hazard areas unless the building is covered by flood insurance. As a result, the inability for new owners to access flood insurance via the NFIP could prevent these real estate transactions from moving forward. NFIP supports half a million home sales annually according to the National Association of Realtors.
The areas most likely to be impacted by this lapse in authorization are Florida, Texas, and Louisiana, where private insurers have been limiting access to policies, requiring homeowners to almost exclusively rely on policies offered by the NFIP.