Congress has once again snatched the National Flood Insurance Program (NFIP) away from its scheduled demise while setting the stage for needing to do it again.  The program, which was due to expire at midnight on Tuesday, was extended for another four months. It was merely the latest is a series of delaying actions while someone, somewhere, figures out how to make the program actually work.

Had the program expired, the Federal Emergency Management Agency (FEMA) which administers it would have been unable to issue new policies. This would have prevented on the sale of houses in specified flood zones that were to be financed by any federally guaranteed mortgages. The National Association of Realtors earlier estimated that some 40,000 home sales would be disrupted if the program were allowed to expire for a month.  FEMA would also be unable to pay out claims in the event of a major flooding disaster - in the middle of hurricane season.

The House passed the extension of NFIP 366 to 52 before leaving on its August recess, but the Senate did not act until Tuesday, voting 86 to 12 to send the bill on to the White House for the president's signature.

One problem with getting any consensus on a permanent resolution to the ongoing flood insurance drama is that only homes in flood-prone areas are required to carry a policy.  With that small base and outsized likelihood of claims, premiums can be unaffordable, so the government subsidizes many of the riskier policies. When Congress attempted a reform early in this decade, stopping the subsidy for new policies and phasing it out for some existing ones, one county in Florida saw premiums for new policies rise from the $3,000 per year paid before a home sold to as much as $60,000 after.  Further, 80 percent of the 5 million homes and businesses covered by the program are in 10 states, thus providing little motivation for change or appetite for a subsidy among Congresspersons from the other 40.

The increasing number of claims, starting with Katrina and continuing with Sandy, and last year's series of bad storms, have put the program on an even rockier footing, and about $21 billion in debt.

In a statement following passage of the extension, David H. Stevens, president and CEO of the Mortgage Bankers Association called on Congress "to negotiate a long-term reauthorization of the NFIP which provides certainty and protections for consumers, expands the private flood insurance market, and exempts commercial/multifamily properties from NFIP mandatory purchase requirements."

The current extension will carry the program through November 30, 2018. That will probably occasion another cliff-hanger.