WASHINGTON, DC – October 6, 2011 – (RealEstateRama) — U.S. Representatives Mike Quigley (IL-05) introduced The Mortgage Credit Availability Act of 2011 (H.R. 3084), which authorizes the Director of the Federal Housing Finance Agency (FHFA) to temporarily increase the conforming loan limits for mortgages that originated in high-cost areas.
“This bill will make it easier for qualified borrowers in Chicago to obtain mortgages for high-cost properties without unfairly saddling them with expensive jumbo loans that carry high interest rates and fees,” said Congressman Quigley. “The legislation brings fairness to the loan limit level in the Chicago area by putting it more in line with the current guidelines for similar metropolitan areas, such as New York and Los Angeles.”
The Mortgage Credit Availability Act would require the FHFA to determine whether a sub-area of any county of over 1 million people has a median home value of three times the national average. If so, the FHFA shall “strongly consider” increasing the conforming loan limit for that sub-area and for the entire Metropolitan Statistical Area (MSA) that it falls in, such as the Chicago MSA.
“I’m very pleased to work with Rep. Quigley to rationalize the geographic mortgage-loan limits that unfairly disadvantage qualified Chicago-area borrowers in relation to similarly-situated borrowers in other high-cost metropolitan areas,” said Congressman Robert Dold (IL-10), who co-sponsored the legislation. “Under our bill, qualified Chicago-area borrowers will also have access to the higher conforming-mortgage limits without unnecessarily getting hit with much more expensive jumbo loan costs.”
Nationwide, 326 total counties qualify for higher conforming loan limits than the national baseline of $417,000, but not one of those counties is in Illinois. This comes despite the fact that Illinois’s Cook County, whose five million residents constitute 41 percent of Illinois’ population, is the second most populous county in the United States.