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LL 10-08: Selling Loans during Lapse of National Flood Insurance Program Authority

The Federal Emergency Management Agency's (FEMA) statutory authority to issue flood insurance policies under the National Flood Insurance Program (NFIP) ended as of May 31, 2010.  Until Congress reauthorizes the NFIP, FEMA may not issue new policies, increase coverage on existing policies, or issue renewal policies.  To help ensure the continued availability of mortgage financing to borrowers seeking to purchase properties located in Special Flood Hazard Areas, Fannie Mae will purchase mortgage loans secured by properties located in Special Flood Hazard Areas that do not have an active flood insurance policy as long as the conditions noted below are met.  For more information on this announcement, please refer to Lender Letter 2010-08.

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