The workaround New York closings have used before

This is the operationally useful part, and it is worth a board and its managing agent knowing before they need it:

“Insurers may assign the seller's NFIP policy to the buyer simply by substituting names, so coverage on the property is maintained and a new policy does not need to be issued.”

Because an existing NFIP policy can be assigned to a buyer by substituting names, a closing that falls inside a lapse can often still proceed on the seller's existing policy. That is exactly the mechanism New York closings have used in prior lapses, and it is the answer a managing agent should have ready when a purchaser's lender panics in December. Our estoppel and resale page covers the association's role at a closing.

One honest caveat on the date

We verified December 11, 2026 on two independent non-government pages. We could not verify it on a government source — congress.gov refuses requests from this environment — and FEMA's own page actively contradicts it. So: treat December 11 as the working date, confirm the public law number before relying on it for anything consequential, and expect the government's own page to be behind.

The provision that actually costs New York associations money

The reauthorization date is the news. The 80% coinsurance rule in the RCBAP is the money, it has not changed, and that is the story.

The Residential Condominium Building Association Policy form F-144, October 2021, is still the current form. Article VII is worth quoting at length because it is the provision New York boards most often discover after a loss:³

“VII. COINSURANCE. A. This Coinsurance Section applies only to coverage on the building. B. We will impose a penalty on loss payment unless the amount of insurance applicable to the damaged building is: 1. At least 80 percent of its replacement cost; or 2. The maximum amount of insurance available for that building under the NFIP, whichever is less.”

FEMA's own worked example makes the cost concrete:

“Example #1 (Inadequate Insurance) / Replacement value of the building $250,000 / Required amount of insurance $200,000 (80 percent of replacement value of $250,000) / Actual amount of insurance carried $180,000 / Amount of the loss -- $150,000 / Deductible -- $500 / Step 1: 180,000 / 200,000 = .90 (90 percent of what should be carried.) / Step 2: $150,000 × .90 = 135,000 / Step 3: $135,000 − $500 = 134,500 / We will pay no more than $134,500. The remaining $15,500 is not covered due to the coinsurance penalty ($15,000) and application of the deductible ($500).”

Ten percent under-insured, and $15,000 of a $150,000 loss is simply uncovered. Every future claim, pro rata.

How the “whichever is less” prong plays out in New York

This is where the arithmetic differs between a Long Island condominium and a Manhattan one, and it is worth working through because it determines what a board buys.

The NFIP building cap is the number of units multiplied by $250,000. For a forty-unit Rockaway or Coney Island building that is $10,000,000, which may genuinely exceed 80% of replacement cost — so the 80% prong controls and the board's target is 80% of replacement cost.

For a large Manhattan or Brooklyn building whose replacement cost far exceeds the NFIP maximum, the cap controls instead. Which means the board must carry the full NFIP maximum to avoid the penalty. Buying less is not a saving; it is a permanent pro-rata reduction of every claim.

Two further New York points. The 80% test runs on replacement cost, and construction costs have been rising. An association that has not re-examined its RCBAP limit since before the post-2021 construction-cost run-up may have drifted below 80% without doing anything at all. And under-insuring against flood is now a warrantability problem, not only a claims problem. Fannie Mae independently requires that “The coverage amount for the building must be at least equal to the lesser of 80% of the replacement cost value, or the maximum coverage amount available from NFIP per unit,” with contents coverage at the lesser of 100% of replacement cost of all common elements or the NFIP maximum.⁴

So the same failure that cuts a claim can also make the building unfinanceable. Excess or private flood above the NFIP layer is the standard New York answer and is expressly contemplated by Fannie's reference to “equivalent private flood insurance.” Our New York insurance requirements page covers the association's coverage stack, and our reserve studies page covers why an uninsured loss lands on reserves.

One gap we are flagging rather than filling: we could not establish the current status of FEMA flood-map and base-flood-elevation revisions in New York City. The only history we could confirm is old — the City appealed FEMA's 2015 preliminary maps, FEMA agreed in October 2016 to revise them, and the City had identified overstatements of between one and two and a half feet. A map change is the single thing that most changes mandatory-purchase obligations for a New York association, and a board in a flood zone should check the City's flood-map resources directly rather than relying on any summary.