Federal flood insurance now expires Dec. 11, after 36 short-term extensions
Congress tied the National Flood Insurance Program to the stopgap spending bill, so December closings in flood zones carry a date risk buyers, sellers and landlords can plan around now.
By Katia Clara · · 3 min read
The continuing resolution Congress passed in September keeps federal programs funded at current levels through Dec. 11, and it carries the flood program along to the same date [2]. The Congressional Research Service counts 36 short-term reauthorizations since the end of fiscal 2017 [1].
The program has about 4.5 million policies covering almost $1.3 trillion, in more than 22,700 communities [1].
A lapse stops new policies and leaves existing ones in force
If authority expires, FEMA cannot issue new flood insurance contracts, though existing policies run to the end of their one-year terms [1]. Its borrowing authority from the Treasury would fall to $1 billion, and claims would be paid as premiums come in [1].
Home sales in flood zones depend on new policies
Federally regulated lenders must generally require flood insurance on properties in Special Flood Hazard Areas, which carry an estimated 1% or greater annual flood risk, and lenders enforce that rule [1]. A buyer in one of those zones usually needs a new policy at closing.
CRS estimated that more than 1,400 closings a day were canceled or delayed during the June 2010 lapse, or more than 40,000 a month [1]. During the 2025 shutdown, some lenders suspended the flood insurance requirement for buyers [1].
| Lapse | Dates |
|---|---|
| 2010 | March 1–2 |
| 2010 | March 29–April 15 |
| 2010 | June 1–July 2 |
| 2011 | October 1–5 |
| 2018 | January 20–22 |
| 2018 | About 8 hours on February 9 |
| 2024 | About 13 hours on March 23 |
| 2025 | October 1–November 12 |
| 2026 | February 1–3 |
Congress has usually made the authority retroactive after a lapse, including in the bill that ended the 2026 shutdown [1]. Short extensions still carry costs for the private insurers that sell and service NFIP policies, and CRS reports that the largest of them left the program in 2011, reportedly over the paperwork that short-term extensions and lapses create [1].
How to use this
For buyers and sellers closing in a flood zone
- Ask your insurance agent to bind the NFIP policy before Dec. 11 for any closing set for December, since new contracts cannot be issued during a lapse [1].
- Get a private flood quote as a backup. Private coverage can satisfy the lender requirement if it meets the statutory conditions [1], so ask your lender in writing whether it will accept the policy you are quoted.
- Add a contract clause that extends the closing date if flood coverage cannot be bound. The most recent long lapse ran from Oct. 1 to Nov. 12, 2025 [1].
For landlords and owners of rentals in flood zones
- List every NFIP policy you hold with its renewal date. Existing policies stay in force through their one-year terms [1], so ask your agent to start any mid-December renewal early.
- Check claim reserves for a large loss. With borrowing authority cut to $1 billion in a lapse, claims are paid as premium revenue comes in [1].
For lenders
- Decide now how you would handle December closings if the program lapses, since some lenders waived the requirement during the 2025 shutdown [1].
This is market commentary, not investment or legal advice.
Sources
- [1]Congressional Research Service, What Happens If the National Flood Insurance Program (NFIP) Lapses, Insight IN10835, Sep 11, 2026.
- [2]National Association of Home Builders, NFIP extension (NAHB blog post on the September 2026 continuing resolution), Sep 4, 2026.
