DHS S&T Partners with Fannie Mae to Improve Use of Flood Insurance
The Directorate of Science and Technology (S&T) has signed a Cooperative Research and Development Agreement (CRADA) with the Federal National Mortgage Association (Fannie Mae) to conduct collaborative research related to flood insurance in the support from the Federal Emergency Management Agency (FEMA), Insurance and Mitigation Administration. S&T and Fannie Mae will conduct joint research to identify ways to expand the use of flood insurance to reduce the financial losses suffered by homeowners and creditors in future storms.
“By examining the correlations between insurance risks and federal assistance programs aimed at closing insurance gaps, the partnership between S&T and Fannie Mae will help build resilient communities,” said David Alexander, Senior S&T Scientific Advisor for Resilience. “S&T will also benefit from this research as we consider current and future strategic priorities to improve our country’s climate and flood resilience. “
This CRADA allows participating organizations to improve the sharing of information, knowledge and expertise. S&T, FEMA and Fannie Mae will collaborate to study the links between flood damage at the individual property level, flood insurance and mortgage loan results. This partnership will help develop a more complete and accurate picture of the effects of flood insurance coverage.
“When we increase the number of insured flood survivors, we help reduce the suffering associated with disasters. This is why this alliance with S&T and Fannie Mae is so crucial, ”said David Maurstad, senior executive of the National Flood Insurance Program. “Flood insurance is the best financial defense against flood risk. We are excited about this new phase of collaboration with these important partners.
Fannie Mae’s analysis of loan performance after Hurricane Harvey for her loans confirms that property damage increased the risk of forbearance, loan modification and serious delinquency. This risk increases in areas outside of Special Flood Risk Zones (SFHA), where flood insurance underwriting rates are much lower. Homeowners with a mortgage are required to carry flood insurance when properties are located in an SFHA, which are areas that will be inundated by a flood having a one percent chance of being equaled or exceeded during a given year, also known as 100 -year of flood.
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