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What happens when a government shutdown
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freezes the flood insurance program that
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millions of Americans rely on? Could
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your dream home purchase be left hanging
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It's official. The US government
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shutdown today, October 1st, 2025 at
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12:01 a.m. and it's causing major
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headaches for homeowners and home
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If you need flood insurance right now,
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Authorization for the National Flood
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Insurance Program, NFIP, the largest
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flood insurance provider in the country,
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is on hold. That leaves millions of
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Americans unable to buy or renew
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policies. For some, that means their
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home purchase is stuck in limbo. For
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others, rebuilding after a flood just
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became way more complicated. What's the
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deal with flood insurance? Here's the
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thing. Flood insurance usually isn't
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part of your standard homeowner's
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policy. Most people who need it,
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especially in high-risisk areas, rely on
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It was set to expire today and the
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government shutdown froze it. No new
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policies, no renewals, no adjustments.
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Lenders won't write governmentbacked
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mortgages for homes in FEMA designated
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flood zones if you don't have flood
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And since private flood insurance is
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pretty rare in many parts of the
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country, that really hurts. Why does
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this matter for home sales?
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Because home sales are stopping in their
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tracks. Imagine this. You've finally
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found your dream home in Florida.
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It's in a high-risisk flood area, but
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you're ready to buy. The lender says
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your mortgage needs flood insurance. But
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guess what? You can't get a new policy
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right now. That's it. Sale delayed.
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Florida is especially hard hit. About
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14,800 home sales there each month
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depend on flood insurance. Without the
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NFIP, many of those sales can't move
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Texas is another big player. Over 3,500
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sales there could be impacted every
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month until the program is back up and
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National numbers don't look much better.
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The NFIP supports nearly half a million
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Past shutdowns have shown just how bad
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it gets. Back in June 2010, during a
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roughly 30-day freeze, the National
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Association of Realtors, N estimated
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that 1,400 home sales were either
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cancelled or delayed every single day.
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Can claims still be paid? That's a yes.
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Even during a shutdown, claims can still
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go through, but that's little comfort
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for anyone trying to buy a house now or
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And with two months left in hurricane
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season, plus winter storms around the
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corner, it's not a great time to be
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stuck. The housing market ripple effect
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goes beyond flood insurance. Experts say
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one hitch leads to another in the
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housing market. NFIP interruptions just
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the start. Housing vouchers, FHA loans
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for firsttime buyers, and other federal
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housing programs could also be
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There's a direct through line between a
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protracted shutdown and worsening
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conditions for the nation's housing
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crisis, said Francis Torres, associate
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director for housing at the bipartisan
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Simply put, the longer this lasts, the
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worse it gets. How did we get here?
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Congress created the NFIP in 1968 to
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make flood insurance more affordable and
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accessible. It also set flood plane
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standards across 22,500
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participating communities. The program
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currently manages over 4.7 million
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policies providing $1.3 trillion in
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But it hasn't been smooth sailing. Since
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2017, the NFIP has seen 33 temporary
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reauthorizations. The last long-term
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deal was back in 2012. And now the
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program owes nearly 23 billion to the US
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Treasury. What's next? A group of
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lawmakers introduced a bill last week to
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reauthorize the NFIP through November
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21st. But for now, the program is stuck,
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and so are the folks who rely on it.
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Home buyers can't buy. Homeowners can't
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renew. Real estate deals in flood zones
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Meanwhile, storms don't wait for
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Congress to get its act together. And
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millions of Americans are left wondering
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what now. Let's recap what we've
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learned. The government shutdown has
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frozen the national flood insurance
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program, preventing new policies and
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renewals across the country.
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This directly impacts home sales and
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flood zones as lenders won't approve
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mortgages without flood insurance.
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Florida faces 14,800 potentially
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affected sales monthly, while Texas has
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The NFIP supports nearly half a million
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home sales annually. And during past
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shutdowns, over 1,400 sales were delayed
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Until Congress reauthorizes the program,
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home buyers, sellers, and current
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homeowners in floodprone areas remain in
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limbo, unable to move forward with their
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Thank you for watching our coverage of
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the government shutdown's impact on
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flood insurance and housing. Stay
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informed as this situation develops and
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we'll keep you updated with the latest
