Overview

• At midnight Oct. 1, the federal shutdown took effect, leaving the National Flood Insurance Program unable to issue new policies or renewals while existing coverage remains in force until expiration.
• FEMA says claims will continue to be paid as funds and borrowing allow, but the program’s Treasury borrowing authority drops from about $30.4 billion to $1 billion during the lapse.
• Housing groups warn the freeze could derail roughly 1,400 home sales per day, with outsized effects in Florida where about 14,800 monthly closings typically depend on flood insurance.
• Banking regulators told lenders they may close loans without flood insurance during the lapse if they manage risks and maintain required disclosures, though buyers and lenders could be exposed if flooding occurs.
• NFIP covers about 4.7 million policies totaling $1.3 trillion but carries nearly $23 billion in debt, and with the Disaster Relief Fund at roughly $10.1 billion, a prolonged shutdown raises concerns about disaster response capacity.