Flood Risk Transparency for Homebuyers Act
Bill: S.2947 | Sponsor: Sen. Rubio, Marco (R-FL)
Policy area: Housing and Community Development

Summary:
Flood Risk Transparency for Homebuyers Act
This bill requires the Department of Housing and Urban Development (HUD) to disclose certain flood hazards to prospective buyers when listing a one-to-four-unit residential property for sale. The requirement applies to every such HUD-owned property located in a special flood hazard area and requires HUD to disclose (1) the estimated monthly cost to insure the property under the National Flood Insurance Program in the zip code where the property is located and (2) whether the property is a severe repetitive loss  property.
A one-to-four-unit residential property is considered a severe repetitive loss property under existing law if the property is covered by flood insurance under the National Flood Insurance Program and has incurred flood-related damage resulting in either (1) four or more separate claim payments each exceeding $5,000, or (2) two or more separate claim payments that cumulatively exceed the value of the property. Severe repetitive loss properties are subject to higher flood insurance rates under the National Flood Insurance Program, but may be eligible for grants to mitigate the flood risk under certain circumstances.

To require the Secretary of Housing and Urban Development to provide a 
 disclosure notice to homebuyers of properties owned by the Department 
  of Housing and Urban Development that are located in special flood 
                 hazard areas, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Flood Risk Transparency for 
Homebuyers Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Federal Emergency Management Agency.
            (2) Covered property.--The term ``covered property'' means 
        a 1-to-4 unit residential property--
                    (A) acquired by the Department as a result of a 
                foreclosure action on a mortgage insured by the Federal 
                Housing Administration under title II of the National 
                Housing Act (12 U.S.C. 1707 et seq.); and
                    (B) located in a special flood hazard area 
                according to a flood hazard boundary map or flood 
                insurance rate map issued by the Administration.
            (3) Department.--The term ``Department'' means the 
        Department of Housing and Urban Development.
            (4) National flood insurance program.--The term ``National 
        Flood Insurance Program'' means the program established under 
        the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et 
        seq.).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (6) Severe repetitive loss property.--The term ``severe 
        repetitive loss property'' has the meaning given the term in 
        section 1307(h) of the National Flood Insurance Act of 1968 (42 
        U.S.C. 4014(h)).

SEC. 3. REQUIREMENT TO PROVIDE DISCLOSURE TO HOMEBUYERS OF PROPERTIES 
              LOCATED IN SPECIAL FLOOD HAZARD AREAS.

    (a) In General.--When listing a covered property for sale by the 
Department, the Secretary shall provide a disclosure notice that 
includes--
            (1) the estimated monthly cost of insurance for the covered 
        property under the National Flood Insurance Program for the zip 
        code in which the covered property is located; and
            (2) whether the covered property is a severe repetitive 
        loss property.
    (b) Annual Report.--Not later than 1 year after the date of 
enactment of this Act, and annually thereafter, the Secretary and the 
Administrator shall submit to Congress a joint report on covered 
properties sold by the Department for which claims were filed under the 
National Flood Insurance Program during the year covered by the report, 
including whether the covered property is a severe repetitive loss 
property.
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