Flood Insurance & Market Risks: What Buyers Need to Know

Risk and response

HAR’s September report noted that economic uncertainty and the current government shutdown could impact the market, particularly because new National Flood Insurance Program policies cannot be issued right now. Many Houston areas are in or near flood zones, and lenders often require flood coverage before closing. Without a valid NFIP policy, some transactions might stall. Buyers and sellers should plan ahead to avoid surprises.

• Buyers: Verify whether the property is in a flood zone and ask your lender if a flood policy is required. If it is, see if an existing policy can be transferred or explore private flood insurance. Consider properties outside high-risk zones to minimize delays.

• Sellers: Be transparent about flood history and whether your current flood insurance can be assigned to the buyer. Taking mitigation steps like elevating utilities or installing flood vents can make your home more attractive.

• Investors: Factor flood risk and insurance costs into your pro forma. High inventory gives you options—don’t rush into a property that carries expensive flood risk without a solid plan.

By following these simple tips, you'll feel more confident about buying your first home.

Want to get started on your home-buying or selling journey? Text HOME to 832-639-4884 or click HERE to begin!

Resources

• HAR market commentary – Notes on the government shutdown and NFIP issues.

• FEMA flood map search – Determine if a property is in a flood zone.

• Private flood insurance overview – How alternative policies can bridge gaps when NFIP is unavailable.