FHA borrowers now eligible for private flood insurance
Canton Repository (OH)
Recent changes to HUD's Flood Insurance policy increase consumer options. On Nov. 21, the U.S. Department of Housing and Urban Development issued a final rule change allowing FHA borrowers to obtain private flood insurance. FHA borrowers will now have additional policy options outside of the traditional National Flood Insurance Program.
This change comes after years of advocacy and will provide equitable resources to both conventional and FHA borrowers. Many FHA borrowers, approximately 84%, are first time home buyers, or individuals of color, roughly 29%. Both demographics are a growing share of the housing market.
The original rule barring FHA borrowers from participating in the private market was created prior to the creation of the private flood insurance market in 2019. Many private insurers offer homeowners competitive plans with high quality and low price options.
Currently the National Flood Insurance Program covers the majority of flood coverage and home asset protection in the United States. Nationally there are 22,000 communities who participate in the NFIP. In Ohio there are 753 communities to include 14 in Stark County, 9 in Trumbull County, and 4 in Carroll County.
Floods continue to be the number one and most costly natural disaster in the United States. The increase in occurrences and cost of damages has led to instability in the NFIP. The Congressional Budget Report shows an ongoing concern with the program as current premiums are not covering the increase in claims. Efforts are being made by many, including the National Association of Realtors, to appropriate necessary funds for the NFIP and preventative flood protection programs.
Historically competition in the market has led to lower prices and more effective solutions for consumers. The changes to HUD'S flood insurance policy will create additional options for homeowners in Northeast Ohio.
Marlin Palich is president of Stark Trumbull Area Realtors, which serves Stark, Carroll and Trumbull counties. Visit www.star.realtor for a complete listing of Realtors and affiliate members. If you have any questions or comments on this article, email info @star.realtor