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Additionally, the $8,000 federal tax credit for first-time home buyers some buyers plan to use runs out April 30, leaving some of them worried they will lose their chance at the credit unless Congress reauthorizes flood coverage when it reconvenes April 12.
Locally, banks require flood insurance for many homes in flood-prone areas of Beaufort County, including the majority of Hilton Head Island and other barrier islands, according to local Realtor associations. The insurance also is required for some homes on the mainland.
"If you can't get the flood insurance, they will not close," said Charles Sampson, president for the Hilton Head Area Association of Realtors, of pending home sales.
The lapse already has delayed or threatened some local real estate closings, said Sampson and Janet Gresham, association executive for the Beaufort County Association of Realtors. Both said buyers will be affected until lawmakers renew the National Flood Insurance Program.
In the slowly recovering housing market, closings still are few and far between and Realtors are excited to have contracts, Gresham said. "Then this comes along and throws another monkey wrench into the whole picture."
Sampson and Gresham said their associations' members have sent letters to Congress asking it to make renewal of the flood program a priority.
"It's critical to our industry and our recovery," Gresham said.
THE BACKGROUND
The U.S. House on March 17 passed an extension of federal coverage through April 30, but the bill stalled in the Senate last week when Sen. Tom Coburn, R-Okla., with the support of other GOP senators including Jim DeMint of South Carolina, objected to the bill over its cost because it included jobless benefits and a variety of other programs. They wanted a short-term extension of the bill's programs paid for with unused stimulus dollars. Democrats wanted the bill to be funded as an emergency measure, a move Coburn said would add to the national debt.
"Rather than spending money we don't have, I supported Sen. Coburn's effort to pay for this legislation with unspent stimulus funds," DeMint said Wednesday.
He added that Senate Majority Leader Harry Reid "chose to play politics and insisted on adding the cost to the deficit." Reid spokesman Tom Brede said the measure will be the first item taken up when lawmakers return from the break.
The Senate adjourned for Easter recess Friday without any resolution, leaving in limbo prospective buyers looking to purchase homes in designated flood-prone areas. People who already have flood insurance are not affected.
'PLAYING GAMES?'
"This is now the third time in recent months that the National Flood Insurance Program has been allowed to lapse, and each time for reasons that have little or nothing to do with the program itself," National Association of Mutual Insurance Companies spokesman Matt Brady told IFAwebnews.com.
The National Association of Professional Insurance Agents also expressed its disappointment with the inactivity on Capitol Hill.
"Congress needs to stop playing games with this," NAPIA president-elect Brian Marino said in a statement posted on the group's Web site. Marino added that at the end of one of the most severe winters in the nation's history, "the snow is melting, the rivers are rising and Congress is leaving its constituents unprotected."
The Senate has its own bill that would extend the flood program through Dec. 30, as part of another measure on extending jobless benefits and tax cuts, but the latter issue is stalling passage among the parties, according to IFAwebnews.com.
Brad Carroll, spokesman for the Federal Emergency Management Agency, which oversees the National Flood Insurance Program, said: "Policies that are already in the process of being issued or renewed will be issued when Congress reauthorizes the program. Payments for claims on existing policies will not be impacted; such policies will continue uninterrupted."
