Blog Post

NFIP Set to Lapse on September 30th

Michael Christians • September 22, 2025

The current funding authorization for the National Flood Insurance Program (NFIP) will expire on September 30, 2025, without Congressional action.

The last long-term reauthorization of the NFIP occurred 13 years ago under the Biggert-Waters Flood Insurance Reform Act of 2012. Since then, Congress has only been able to reauthorize the program via short-term spending measures.

If the NFIP is allowed to lapse on September 30th, borrowers will not be able to purchase new flood insurance contracts. Existing NFIP contracts will remain in effect until the end of their current one-year policy term. However, per the interagency Q&A regarding flood insurance, credit unions are permitted to close loans secured by property located in a special flood hazard area during the lapse period considering all of the following:

They obtain a Standard Flood Hazard Determination in connection with the transaction,
They provide the Notice of Special Flood Hazards within a reasonable period of time prior to closing,
At its discretion, the credit union can require that closing be postponed until the NFIP is available again,
At its discretion, the credit union can require that the borrower purchase a private flood insurance policy, and
For loans closed during the lapse period without coverage, the credit union must have policies and procedures in place to require the purchase of flood insurance as soon as the NFIP is again active.

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