I’m not sure how, but the Obama’s managed to procure a Fannie Mae/Freddie Mac mortage $903,000 over the legal limit.
While researching an article about Obama’s Chicago home about the circumstances surrounding who is the “owner”, I happened across a bit of information: Obama’s home has a Fannie Mae-Freddie Mac mortgage to the tune of $1,320,000. (Page 5 of Cook County Property Assessment Record)
The information comes from the Cook County Clerk’s office where the “owner” of the Obama home is listed as William Miceli, a former supervisor of Obama’s when he worked at the David Law Firm.
What’s unusual about the Obama mortgage is that the upper limits of a Fannie Mae loan on a single family dwelling as of January, 2008, is $417,000 while mortgages in “high cost” areas cannot exceed $729,750.
The Obama’s mortage, through Northern Trust Company, is in the amount of $1,320,000.
The limits for a Freddie Mac single family dwelling is $417,000, with an upper tier of $625,500 for homes located in Alaska, Hawaii, the Virgin Islands, and Guam.
I looked into whether Cook County, Illinois, where the Obama home is located, and whether it is considered by Fannie Mae or Freddie Mac as a “high cost area”.
I found this little snippet written by Lew Sichelman, of the Reality Times in 2004, a few months prior to the Obama’s purchasing their home:
Effective Jan. 1, the new FHA “ceiling” in high cost areas is 87 percent of the limit on loans which can be purchased by Freddie Mac.
The Freddie Mac/Fannie Mae conventional loan limit rose to $359,650, also on Jan. 1. In most of the nation’s 3,300 other jurisdictions, the FHA “floor” is $172,632. But in about 530 places, the FHA maximum is somewhere in between $172,632 and $359,650.
The new limits already are the subject of controversy.
For example, some Chicago area lenders already are grumbling that Jefferson County, a distant Washington area jurisdiction at best, is considered a high-cost area but Cook County, Ill., is not.
I took it one step further and entered the Obama’s South Greenwood address at Fannie Mae’s Loan Limit Geocoder. The results: Obama’s South Greenwood home was eligible for a maximum Fannie Mae loan of $417,000.
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