One Mortgage, No Guarantees

The house has never flooded. Fifty years on the west side of the Pawleys Island marsh, built in 1976, and not once has water come inside. No claim. No damage. No disaster story to tell.

The homeowner known in local reporting as Barber has a premium notice. His flood insurance has more than doubled since 2023. He now pays $2,650 a year in private flood coverage. He switched agencies this year to avoid a jump to $3,350. The type of loan he carried when he bought the house about six years ago required him to shop the private market rather than the National Flood Insurance Program, which means the 25 percent discount that Pawleys Island's Class 5 Community Rating earns for NFIP policyholders doesn't touch him. Every dollar of the increase lands in his escrow, unshielded.

This year, he refinanced. He'd always planned to eventually, since interest rates were high when he purchased, but the insurance forced the timing. He told his loan broker it had to work, or he didn't know if he could stay.

The refinancing bought him room. Next year's premium, the year after's, the twenty-some years remaining on a mortgage that assumed the cost of insuring his home would stay within reach of a household budget: all of that remains unknown.

What September looks like from his kitchen table

Barber's policy is private. The NFIP doesn't set his rate. But the federal program sets the conditions for every coastal real estate transaction around him, and it expires September 30, 2026. Less than five months from now. Closer than the end of hurricane season.

All property in the Town of Pawleys Island falls within Flood Zones AE or VE. Georgetown County, where Pawleys Island sits, has already lost nearly 1,300 NFIP policies in recent years. Some of those former policyholders moved to private carriers. Some dropped coverage entirely. On Hilton Head, the town's floodplain administrator told reporters that seniors on fixed incomes are letting policies go because $2,500 a year is more than they can absorb. Whether Barber knows any of these numbers is unclear from the reporting. He knows the number on his own renewal letter and the conversation he had with his broker about whether the math still worked.

None of this reaches him in the form it actually takes: committee referrals and appropriations riders. Since 2017, Congress has passed 35 short-term NFIP reauthorizations. A bipartisan reform bill sits in committee. It has not moved. The most likely path to extension is attachment to FY2027 appropriations. But FY2026 appropriations weren't passed before their deadline either. That failure caused a 43-day lapse last fall. Past lapses have stalled an estimated 1,400 home sales a day nationally. The program was retroactively restored. The closings that fell through were not.

Barber, holding a private policy, wouldn't lose coverage in another lapse. But a neighbor trying to sell would find no buyer who could close. A buyer trying to purchase the house next door would find no lender willing to proceed. The value of his home doesn't exist independent of the market's ability to transact around it.

What the mortgage assumed

Experts disagree on whether Congress will let the program lapse again. They disagree on whether Risk Rating 2.0's repricing will stabilize or keep climbing. FEMA says premiums won't increase indefinitely. The GAO estimates 95 percent of NFIP policies won't reach their full risk-based rate until 2037, which is eleven years past the current expiration and well within the life of Barber's mortgage. Nobody can tell him what his premium will be in five years. Nobody can tell him the federal program that underwrites his neighbors' coverage will exist in its current form by then.

A 30-year mortgage is a bet on three decades of stability. Stable property values, stable insurance markets, stable federal architecture. Barber's lender underwrote that bet. The NFIP, which sets the floor for coastal real estate markets up and down the South Carolina coast, has not been able to guarantee more than a few months at a time for nine years running.

There is a 26 percent chance of flooding during a 30-year mortgage in Pawleys Island. Barber knew this when he bought. The flood risk is the same. The cost of carrying it inside a household budget has more than doubled, and the program that anchors the market around him plans in increments shorter than a hurricane season.

He could absorb the next increase. He could wait for Congress to act. He could leave. The outline of a life being planned in twelve-month increments. A house that has never flooded, on the west side of the marsh, and a homeowner who refinanced this year just to stay.