The economic stimulus package--proposed last week by congress and the President--would seek to raise the limit on loans available for purchase by the government (Fannie May & Freddie Mac.) The current limit for such loans is $417,ooo. The plan seeks to raise that cap to $625,000.
This is important in a high priced market like Chicago's. Loans that can't be backed by the federal government (those currently above the $417K cap,) carry a higher interest rate than those that can--often more than a 1% difference. This move will make it easier and cheaper for Chicago buyers to get affordable loans. In a city where a 2 bedroom condo can easily run at $400 and above, this should help get buyers buying again. That, of course, if great news for sellers in those markets.
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