WASHINGTON – The Science and Technology Directorate (S&T) signed a Cooperative Research and Development Agreement (CRADA) with the Federal National Mortgage Association (Fannie Mae) to carry out collaborative research related to flood insurance in support of the Federal Emergency Management Agency (FEMA), Federal 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 correlations between insurance perils and federal assistance programs aimed at closing insurance gaps, S&T and Fannie Mae’s partnership will help strengthen community resilience,” said David Alexander, S&T Senior Science Advisor for Resilience. “S&T will also leverage this research as we consider current and future strategic priorities to enhance our nation’s climate and flood resilience.”
This CRADA enables the participating organizations to enhance the sharing of information, knowledge, and expertise. S&T, FEMA, and Fannie Mae will collaborate to study the linkages between flood damage at the individual property level, flood insurance, and mortgage loan outcomes. This partnership will help develop a more comprehensive and accurate picture of the effects of flood insurance coverage.
“When we increase the number of insured survivors of flood events, we help reduce disaster suffering. That’s 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 the perils of flooding. We are enthusiastic about this new phase of collaboration with these important partners.”
Fannie Mae’s analysis of post-Hurricane Harvey loan performance for its loans confirms that property damage increased the risk of forbearance, loan modification, and serious delinquency. That risk increases in areas outside of the Special Flood Hazard Areas (SFHA), where flood insurance take-up rates are far lower. Homeowners with a mortgage are required to purchase flood insurance when properties are located in an SFHA, which are areas that will be inundated by a flood event having a one-percent chance of being equaled or exceeded in any given year, also known as the 100-year flood.
# # #