HUD says 50-year mortgage on table, industry eyes hurdles

The beleaguered 50-year mortgage is one of many housing initiatives under consideration for the new year, according to a Trump administration official, and that has industry experts reiterating some suggestions for things to look into before committing to it.

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The reactions come in the wake of a Fox News interview on Sunday with Secretary Scott Turner of the Department of Housing and Urban Development, in which he said the concept and others that have been publicly discussed are still “on the table” but require “more research.”

Whether or not the 50-year mortgage moves forward remains to be seen, but there are broad interagency plans for more housing initiatives in 2026, according to Turner.

“President Trump is prioritizing housing and home affordability going into the new year,” he said.

A lower payment, but potentially a higher rate

In response to word that the federal government still has the 50-year mortgage on its list of possible initiatives to research, mortgage professionals doubled-down on recommendations that the government consider the tradeoffs involved while remaining open to the idea.

“The higher rate for the longer term will offset the benefit of stretching the loan term. However, having as many options as possible is always a good thing for consumers,” Melissa Cohn, regional vice president at William Raveis Mortgage, when asked about this.

Based on the original pitch for a 50-year mortgage – which was not from HUD but from the Federal Housing Finance Agency that oversees the separate government-sponsored enterprise market – the rate for one would be an estimated 25 basis points above a typical home loan.

While a 50-year 6.5% mortgage might reduce a monthly payment of around $2,528 for a $400,000 loan by around $273, with the upward adjustment the payment reduction would be below $198, according to David Akre, principal at Whole Loan Capital.

A lack of U.S. precedent and supply-demand factors

While it’s said 50-year mortgages are not completely unprecedented in the nonqualified mortgage market, Akre said he hasn’t seen any recently in the U.S.

Akre said he has seen some 40-year products with an interest only component for the first 10 years. The rate is fixed for a 30-year period.

Kimber White, president of the National Association of Mortgage Brokers said in an interview earlier this year that he would make sure there was no other option that might lower a borrower’s payment enough before resorting to a 50-year which adds to interest. In some cases a hybrid loan with a lower starting rate might be an appropriate alternative.

White has also shown concern about the impact of introducing expanded use of a 50-year product in the United States on supply and demand.

“Isn’t it also going to increase demand in a market that is already tight in some areas?” White said.

The broader view of housing initiatives currently in play

Federal plans for housing initiatives go far beyond the 50-year mortgage and they also extend to the full range of ages in the market, not just emerging homebuyers, according to Turner.

“At the end of the day the president and the other leaders in the administration will discuss what is the best possible, secure path to help the American people to afford a home, not just younger people,” he said during the Fox News interview.

Turner said he would also be considering the risk any initiative under consideration posed to the Federal Housing Administration’s insurance fund and the broader government backing the department provides to mortgages through both FHA and Ginnie Mae.

“We want to make sure that the housing market is secure and any FHA/Ginnie Mae taxpayer-backed mortgages are stable and secure,” he said.