SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Flood Insurance Mar-
ket Parity and Modernization Act’’. 
SEC. 2. PRIVATE FLOOD INSURANCE. 
(a) MANDATORY PURCHASE REQUIREMENT.— 
(1) AMOUNT AND TERM OF COVERAGE.—Sec-
tion 102 of the Flood Disaster Protection Act of 
1973 (42 U.S.C. 4012a) is amended by striking 
‘‘Sec. 102. (a)’’ and all that follows through the end 
of subsection (a) and inserting the following: 
‘‘SEC. 102. (a) AMOUNT AND TERM OF COVERAGE.— 
After the expiration of sixty days following the date of en-
actment of this Act, no Federal officer or agency shall ap-
prove any financial assistance for acquisition or construc-
tion purposes for use in any area that has been identified 
by the Administrator as an area having special flood haz-
ards and in which the sale of flood insurance has been 
made available under the National Flood Insurance Act 
of 1968, unless the building or mobile home and any per-
sonal property to which such financial assistance relates 
is covered by flood insurance: Provided, That the amount 
of flood insurance (1) in the case of Federal flood insur-
ance, is at least equal to the development or project cost 
of the building, mobile home, or personal property (less 
estimated land cost), the outstanding principal balance of 
the loan, or the maximum limit of Federal flood insurance
coverage made available with respect to the particular type 
of property, whichever is less; or (2) in the case of private 
flood insurance, is at least equal to the development or 
project cost of the building, mobile home, or personal 
property (less estimated land cost), the outstanding prin-
cipal balance of the loan, or the maximum limit of Federal 
flood insurance coverage made available with respect to 
the particular type of property, whichever is less: Provided 
further, That if the financial assistance provided is in the 
form of a loan or an insurance or guaranty of a loan, the 
amount of flood insurance required need not exceed the 
outstanding principal balance of the loan and need not be 
required beyond the term of the loan. The requirement 
of maintaining flood insurance shall apply during the life 
of the property, regardless of transfer of ownership of such 
property.’’. 
(2) REQUIREMENT
FOR
MORTGAGE
LOANS.— 
Subsection (b) of section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a(b)) is 
amended— 
(A) by striking the subsection designation 
and all that follows through the end of para-
graph (5) and inserting the following: 
‘‘(b) REQUIREMENT FOR MORTGAGE LOANS.—
‘‘(1) REGULATED
LENDING
INSTITUTIONS.— 
Each Federal entity for lending regulation (after 
consultation and coordination with the Financial In-
stitutions Examination Council established under the 
Federal Financial Institutions Examination Council 
Act of 1974) shall by regulation direct regulated 
lending institutions not to make, increase, extend, or 
renew any loan secured by improved real estate or 
a mobile home located or to be located in an area 
that has been identified by the Administrator as an 
area having special flood hazards and in which flood 
insurance has been made available under the Na-
tional Flood Insurance Act of 1968, unless the 
building or mobile home and any personal property 
securing such loan is covered for the term of the 
loan by flood insurance: Provided, That the amount 
of flood insurance (A) in the case of Federal flood 
insurance, is at least equal to the outstanding prin-
cipal balance of the loan or the maximum limit of 
Federal flood insurance coverage made available 
with respect to the particular type of property, 
whichever is less; or (B) in the case of private flood 
insurance, is at least equal to the outstanding prin-
cipal balance of the loan or the maximum limit of 
Federal flood insurance coverage made available
with respect to the particular type of property, 
whichever is less. 
‘‘(2) FEDERAL AGENCY LENDERS.— 
‘‘(A) IN
GENERAL.—A Federal agency 
lender may not make, increase, extend, or 
renew any loan secured by improved real estate 
or a mobile home located or to be located in an 
area that has been identified by the Adminis-
trator as an area having special flood hazards 
and in which flood insurance has been made 
available under the National Flood Insurance 
Act of 1968, unless the building or mobile home 
and any personal property securing such loan is 
covered for the term of the loan by flood insur-
ance in accordance with paragraph (1). Each 
Federal agency lender may issue any regula-
tions necessary to carry out this paragraph. 
Such regulations shall be consistent with and 
substantially identical to the regulations issued 
under paragraph (1). 
‘‘(B) REQUIREMENT TO ACCEPT FLOOD IN-
SURANCE.—Each Federal agency lender shall 
accept flood insurance as satisfaction of the 
flood insurance coverage requirement under 
subparagraph (A) if the flood insurance cov-
erage meets the requirements for coverage 
under that subparagraph. 
‘‘(3) GOVERNMENT-SPONSORED
ENTERPRISES 
FOR HOUSING.—The Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage 
Corporation shall implement procedures reasonably 
designed to ensure that, for any loan that is— 
‘‘(A) secured by improved real estate or a 
mobile home located in an area that has been 
identified, at the time of the origination of the 
loan or at any time during the term of the loan, 
by the Administrator as an area having special 
flood hazards and in which flood insurance is 
available under the National Flood Insurance 
Act of 1968, and 
‘‘(B) purchased or guaranteed by such en-
tity, 
the building or mobile home and any personal prop-
erty securing the loan is covered for the term of the 
loan by flood insurance in the amount provided in 
paragraph (1). The Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage 
Corporation shall accept flood insurance as satisfac-
tion of the flood insurance coverage requirement 
under paragraph (1) if the flood insurance coverage
provided meets the requirements for coverage under 
that paragraph and any requirements established by 
the Federal National Mortgage Association or the 
Federal Home Loan Corporation, respectively, relat-
ing to the financial strength of private insurance 
companies from which the Federal National Mort-
gage Association or the Federal Home Loan Mort-
gage Corporation will accept private flood insurance, 
provided that such requirements shall not affect or 
conflict with any State law, regulation, or procedure 
concerning the regulation of the business of insur-
ance. 
‘‘(4) APPLICABILITY.— 
‘‘(A) EXISTING
COVERAGE.—Except as 
provided in subparagraph (B), paragraph (1) 
shall apply on the date of enactment of the Rie-
gle Community Development and Regulatory 
Improvement Act of 1994. 
‘‘(B) NEW
COVERAGE.—Paragraphs (2) 
and (3) shall apply only with respect to any 
loan made, increased, extended, or renewed 
after the expiration of the 1-year period begin-
ning on the date of enactment of the Riegle 
Community Development and Regulatory Im-
provement Act of 1994. Paragraph (1) shall
apply with respect to any loan made, increased, 
extended, or renewed by any lender supervised 
by the Farm Credit Administration only after 
the expiration of the period under this subpara-
graph. 
‘‘(C) CONTINUED
EFFECT
OF
REGULA-
TIONS.—Notwithstanding any other provision of 
this subsection, the regulations to carry out 
paragraph (1), as in effect immediately before 
the date of enactment of the Riegle Community 
Development and Regulatory Improvement Act 
of 1994, shall continue to apply until the regu-
lations issued to carry out paragraph (1) as 
amended by section 522(a) of such Act take ef-
fect. 
‘‘(5) RULE OF CONSTRUCTION.—Except as oth-
erwise specified, any reference to flood insurance in 
this section shall be considered to include Federal 
flood insurance and private flood insurance. Nothing 
in this subsection shall be construed to supersede or 
limit the authority of a Federal entity for lending 
regulation, the Federal Housing Finance Agency, a 
Federal agency lender, the Federal National Mort-
gage Association, or the Federal Home Loan Mort-
gage Corporation to establish requirements relating
to the financial strength of private insurance compa-
nies from which the entity or agency will accept pri-
vate flood insurance, provided that such require-
ments shall not affect or conflict with any State law, 
regulation, or procedure concerning the regulation of 
the business of insurance.’’; and 
(B) by striking paragraph (7) and insert-
ing the following new paragraph: 
‘‘(7) DEFINITIONS.—In this section: 
‘‘(A) FLOOD INSURANCE.—The term ‘flood 
insurance’ means— 
‘‘(i) Federal flood insurance; and 
‘‘(ii) private flood insurance. 
‘‘(B) FEDERAL
FLOOD
INSURANCE.—the 
term ‘Federal flood insurance’ means an insur-
ance policy made available under the National 
Flood Insurance Act of 1968 (42 U.S.C. 4001 
et seq.). 
‘‘(C) PRIVATE
FLOOD
INSURANCE.—The 
term ‘private flood insurance’ means an insur-
ance policy that— 
‘‘(i) is issued by an insurance com-
pany that is— 
‘‘(I) licensed, admitted, or other-
wise approved to engage in the busi-
ness of insurance in the State in 
which the insured building is located, 
by the insurance regulator of that 
State; or 
‘‘(II) eligible as a nonadmitted 
insurer to provide insurance in the 
home State of the insured, in accord-
ance with sections 521 through 527 of 
the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (15 
U.S.C. 8201 through 8206); 
‘‘(ii) is issued by an insurance com-
pany that is not otherwise disapproved as 
a surplus lines insurer by the insurance 
regulator of the State in which the prop-
erty to be insured is located; and 
‘‘(iii) provides flood insurance cov-
erage that complies with the laws and reg-
ulations of that State. 
‘‘(D) STATE.—The term ‘State’ means any 
State of the United States, the District of Co-
lumbia, the Commonwealth of Puerto Rico, 
Guam, the Northern Mariana Islands, the Vir-
gin Islands, and American Samoa.’’.
(b) EFFECT OF PRIVATE FLOOD INSURANCE COV-
ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 
Section 1308 of the National Flood Insurance Act of 1968 
(42 U.S.C. 4015) is amended by adding at the end the 
following: 
‘‘(n) EFFECT OF PRIVATE FLOOD INSURANCE COV-
ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 
For purposes of applying any statutory, regulatory, or ad-
ministrative continuous coverage requirement, including 
under section 1307(g)(1), the Administrator shall consider 
any period during which a property was continuously cov-
ered by private flood insurance (as defined in section 
102(b)(7) of the Flood Disaster Protection Act of 1973 
(42 U.S.C. 4012a(b)(7))) to be a period of continuous cov-
erage.’’. 
Passed the House of Representatives April 28, 2016. 
Attest: 
Clerk.
114TH CONGRESS 
2D SESSION 
H. R. 2901 
AN ACT 
To amend the Flood Disaster Protection Act of 
1973 to require that certain buildings and per-
sonal property be covered by flood insurance, and 
for other purposes.