The owners of apartment properties may soon struggle to renew insurance policies for floods and terror attacks, and that may already be increasing the difficulty in securing financing or refinancing for those properties. Two federal programs that support these insurance policies—the National Flood Insurance Program (NFIP) and Terrorism Risk Insurance Program (TRIA)—are both about to expire.
“Property owners of all kinds suffer when the fate of the NFIP or TRIA hangs under a cloud of uncertainty,” says Kevin Donnelly, vice president of government affairs with the National Multifamily Housing Council (NMHC), an industry trade group. “When these programs lapse, loans with any federal backing are unable to go to closing or loans are unable to be refinanced.”
Flood is insurance increasingly expensive, difficult to get
Apartment properties threatened by flooding need to have flood insurance in order to secure many kinds of financing. However, flood insurance has become increasingly expensive, and the extra cost has become unpredictable.
“Pricing keeps going
up, up, up!” according to a president at one national apartment firm, who preferred not to be named. “We’ll spend the next few months finalizing our 2020 insurance and want to make sure the process stays competitive. It is a tough environment.” […]Discuss financing your commercial property with Liberty by contacting us with the form on this page or use our other contact information here.
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