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Politics & Government

Senator: Loan Bank For Flood Zone Homes Faces Long Odds

The one idea state lawmakers heard to help homeowners facing rising flood insurance rates may have been a dud.

A Lycoming County floodplain manager told lawmakers in January: If you want a long-term way to help flood zone property owners, set up a loan bank.

Fran McJunkin said the state was in the perfect position to provide low-cost loans to people trying to flood-proof their homes.

“I think it’s really important that people are responsible for the mitigation themselves,” McJunkin said. “And this is not a giveaway program. This would be helping people find a path.”

Nearly three months later, Sen. Gene Yaw (R-Lycoming) said prospects aren’t looking good.

“We still may be able to do it — we just have found out that there’s too many problems and restrictions,” he said. “It’s not as simple as we thought initially. And that was the intent — we said we would look into it. We have.”

The conversation was prompted earlier this year when insurance premiums spiked due to federal legislation to make property owners pay for the risk of living in flood-prone areas. Changes signed into law last month will phase in the higher rates.

“Since it’s a federal law, there’s not a whole lot that the state can do,” said Yaw. “That’s why we had said that if we can provide some kind of financial incentive for people to remediate homes in the floodplains, then they could get a cheaper rate.”

“What can we tell them?” Yaw said. “We’re still trying.”

The state’s Department of Insurance has also moved to encourage more private flood insurance policies in lieu of the insurance provided through the federal government. But a spokeswoman stresses such a product probably won’t be readily available for the next year.