Chicago real estate experts have been left speechless by the exclusion of the city’s real estate market in the list of 100 high-cost regions around the United States. The list was compiled by the U.S. Department of Housing and Urban Development, and is used by firms such as Fanny Mae to determine the maximum amount for loans the company will purchase.
Fanny Mae and Freddie Mac will buy mortgages in cities that are included on the list valued up to $729,750. However, for Chicago, the maximum value for a mortgage that these companies will look at is just $417,000.
The exclusion of Chicago makes little sense, particularly in neighborhoods north of downtown where homes can rarely be found for less than $1 million. Many suburban areas, particularly along the North Shore are also seeing a decline in activity as a result of limitations on Fanny Mae.
With mortgage rates above 7 percent for most loans, it is becoming more difficult for the average Chicagoan to find a mortgage for an average-priced home in the city. With a higher limit, more lenders could participate in the market, bringing down rates for Chicago Homes for Sale.
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