Agencies Issue Guidance for NFIP Lapse

10/01/25

Federal financial institution regulatory agencies today remind lenders that they may continue to make loans that are subject to the federal flood insurance statutes when the National Flood Insurance Program is not available. During this period, lenders are allowed to make these loans without requiring federal flood insurance.

As explained in the Interagency Questions and Answers Regarding Flood Insurance, in Q&A Applicability 12, lenders may continue to make loans without flood insurance coverage during this time but must continue to make flood determinations; provide timely, complete, and accurate notices to borrowers; and comply with other applicable parts of the flood insurance regulations. In addition, lenders should evaluate safety and soundness and legal risks and should prudently manage those risks during the lapse period. The guidance also addresses the availability and use of private flood insurance.

The OBL has been working with members of the Ohio delegation to reauthorize NFIP, which can be done outside of the broader government funding negotiations. The US Senate will be in session Friday and all weekend and we expect them to take up legislation to reauthorize the program during that time.