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Quigley Leads Push for Fairer Chicago Housing Loans

January 14, 2014

Calls on Federal Housing Finance Agency to raise loan limits to match other high-cost housing markets

WASHINGTON - Today, U.S. Representative Mike Quigley (IL-05) led an effort with nine of his Illinois congressional colleagues urging the Federal Housing Finance Agency (FHFA) to bring fairness to the Chicago-area housing market by increasing the Chicago conforming loan limit rate to match other high-cost housing markets.

"Chicago's housing market is vital to the national housing market recovery and should be treated equitably in the federal loan limit process," said Rep. Quigley. "The flawed ‘one-size-fits-all' loan limit formula puts Chicago behind similar major metropolitan markets and slows growth in our region. I hope the FHFA's new Director, Mel Watt, will closely examine this issue and use the agency's discretionary authority to raise Chicago's loan limit without delay."

Chicago currently adheres to the standard FHFA conforming loan limit of $417,000 despite a large stock of housing well above this amount. Similar "high-cost" areas like San Francisco and Washington, DC qualify for loan limits as high as $625,000. The limit forces Chicago homebuyers securing loans above $417,000 to obtain a "jumbo loan" with higher interest rates and fees. Jumbo loans are also harder to acquire, significantly limiting the pool of potential homebuyers.

Conforming loan limits are based on median home values in a Metropolitan Statistical Area (MSA). Many MSAs contain one or two small homogenous, wealthy counties that boost the limit for the entire MSA. Chicago, however, does not qualify because of its large, economically diverse counties like Cook and DuPage.

Joining Rep. Quigley in the letter to Director Watt were Representatives Danny Davis (IL-07), Tammy Duckworth (IL-08), Bill Foster (IL-11), Luis Gutiérrez (IL-04), Robin Kelly (IL-02), Dan Lipinski (IL-03), Bobby Rush (IL-01), Jan Schakowsky (IL-09) and Brad Schneider (IL-10). A copy of the letter can be found here.

Rep. Quigley made similar requests to former FHFA Director Edward DeMarco in both 2011 and 2012 and has raised the issue with Treasury Secretary Jack Lew and Housing and Urban Development Secretary Shaun Donovan. He also met with former Treasury Secretary Timothy Geithner to discuss alternate solutions.

Rep. Quigley is the only Illinois member on the House Appropriations Committee, where he sits on the Subcommittee on Financial Services and General Government and the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD). He previously served as Ranking Member for the House Oversight and Government Reform Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs.