trump Administration Considers 50-Year Mortgages to Boost Homeownership
WASHINGTON – The Trump administration is exploring the possibility of offering 50-year mortgages as a potential solution to rising home prices and declining affordability, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced Sunday. The proposal, aimed at lowering monthly payments for prospective homebuyers, has sparked debate among financial experts.
The move comes as prospective homebuyers grapple with historically high interest rates and limited inventory, pricing many out of the market. A 50-year mortgage would significantly reduce monthly payments compared to conventional 30-year loans, potentially opening homeownership to a wider range of Americans, particularly younger generations. However, critics warn that extending the loan term dramatically increases the total interest paid over the life of the loan.
“We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying,” Pulte stated on X,formerly Twitter. “A 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!” he further clarified the administration is also “working on ways to give relief in the 5 year mortgage,the 10 year mortgage,and the 15 year mortgage.”
Financial analyst David bahnsen criticized the proposal, noting that “banks would love it as the total interest paid would be dramatically higher with such a longer amortization period.” Bahnsen suggested that easing regulatory burdens related to zoning and permitting to expand housing construction would be a more effective approach to address affordability.
The FHFA, which oversees Fannie mae and Freddie Mac, would need to implement changes to allow for the offering of such long-term mortgages. The proposal is still in the progress phase, and details regarding eligibility requirements and potential risks are still being evaluated. The administration anticipates further announcements regarding its broader housing affordability strategy in the coming weeks.
