The Office of Management and Budget Director Mick Mulvaney yesterday submitted a proposal to congressional leaders to reform the National Flood Insurance Program. NAHB Chairman Granger MacDonald issued the following statement regarding the proposal:
“While NAHB supports reforms to the National Flood Insurance Program (NFIP) that will keep the program fiscally sound and preserve rate affordability, we strongly oppose the new proposal by OMB Director Mulvaney to phase out new NFIP policies for newly-constructed homes. It would simply prevent home builders from being able to provide safe and affordable housing to consumers. By creating uncertainty in the housing market, this proposal would also harm local communities and impair economic growth.
“New homes are built to more stringent safety standards and usually fare much better than the older housing stock in flooding disasters. Moreover, new construction policyholders pay full-risk rates, so they put more into the NFIP than they take out in claims. Why does OMB needlessly propose to penalize new construction? It would only hurt the fiscal soundness of the NFIP and fail to ease taxpayer burdens.
“NAHB will continue to work with Congress and the administration to achieve needed reforms to the NFIP that will ensure it remains efficient and effective in protecting property owners, creates more stability in the housing market, and improves the financial viability of the program.”