Shared with permission of the National Association of REALTORS

If Congress is unable to agree on the provisions of a Continuing Resolution (CR) to fund the federal government by September 30, 2023, the result will be a partial shutdown of some government operations. This partial shutdown will include some federal housing, mortgage, and other programs of interest to the real estate industry. Essential services, such as the post office, will continue to run. A summary of the impact on selected agencies is provided below.

While this is a very politically dynamic event, NAR staff will continue to monitor federal agencies and work with Congress, the Administration, and other groups to assess ongoing impacts to NAR members and their businesses.  NAR has created this PDF with information about the different operations that will be affected, and a staff contact who can answer any additional questions that you may have.

In addition to this information provided by NAR, Joy Duperault, State NFIP Coordinator/Director, Flood Hazard Management Program at the MA Dept. of Conservation & Recreation was kind enough to share some additional information of the impact on the National Flood Insurance Program (NFIP):

What a Government Shutdown Means for the NFIP

As the United States barrels toward the end of the fiscal year, a stalemate over the budget is making a government shutdown seem more likely by the day. Without a budget resolution in place by the Sept. 30 deadline, federal agencies must stop all non-essential work.

In a memorandum issued this week, FEMA said the shutdown “would significantly impact the NFIP’s normal operations” because it would not be allowed to enter into any flood insurance contracts.

During a lapse in authority, a WYO Company or NFIP Direct may not:

• Issue policies for new business;
• Issue policies for requests to increase or add coverage; or
• Issue renewal notices.

Existing policies that do not expire during the shutdown will still be in effect and claims can be paid out, however with the lapse in authority, thousands of real estate transactions where flood insurance is required by Congress could be impacted.

With the House in gridlock, last night the Senate proposed a stopgap measure to extend current funding levels through Nov. 17. This Continuing Resolution (CFR) would extend the NFIP authority through the duration of the CR and also contains $6 billion to replenish FEMA’s Disaster Relief Fund, short of the $16 billion the administration wanted. The measure would free up another $20 billion for disaster aid by allowing FEMA to tap its full-year appropriation up front.

Unfortunately, we’ve been here before. The NFIP has received 17 short-term extensions between 2008 and 2012, and lapsed four times: March 1 to March 2, 2010; March 29 to April 15, 2010; June 1 to July 2, 2010; and October 1 to October 5, 2011. In most cases when the NFIP lapsed, Congress reauthorized the NFIP retroactively, according to a recent brief by the Congressional Research Service.