The president signed a bill Thursday that extends funding for the National Flood Insurance Program, which had been allowed to lapse March 28.
Funding will be restored through May 31 under the legislation.
The lapse had threatened to complicate home closing on the Outer Banks because flood insurance is required by federal law on any bank-owned or government-backed mortgage loan, such as Fannie Mae, Freddie Mac, VA and USDA.
The program, which is set to expire on June 30, is expected to be extended by at least six months or possibly through mid-2011, according to the paper.
The move signals that the U.S. government is not yet ready to drop the temporary measures adopted during the financial crisis to prop up the banking system, the Journal said.
Industry officials have warned that ending the program could lead to more bank failures because businesses would pull money from banks that they believe are in trouble, the paper said.