Federal Housing Finance Agency Director Bill Pulte confirmed the proposal on social media, according to Housing Wire.
The announcement came after Trump posted an image on Truth Social featuring his headshot alongside a “50-year mortgage” title, compared with Franklin D. Roosevelt’s image paired with the “30-year mortgage.”
The proposal is another effort by the president to address housing affordability issues.
Since taking office, Trump has issued an executive order for emergency price relief in housing and pressured the Federal Reserve to lower interest rates.
A longer mortgage term would reduce monthly payments for homeowners.
On a $400,000 home with a 6.575% interest rate, a 30-year fixed mortgage would cost $2,038 in principal and interest monthly, while a 50-year term would lower payments to $1,822.
However, the plan faces significant legal obstacles.
The Dodd-Frank Wall Street Consumer Protection Act, passed after the 2008 financial crisis, includes Qualified Mortgage rules that currently do not allow for mortgage terms beyond 30 years.
Financial experts have expressed concerns about the proposal.
While monthly payments would decrease, homeowners would build equity at a much slower rate over the extended term.
“I understand that we have housing affordability challenges in America, but subsidising more demand from 30- to 50-year mortgages is not the policy we want to take now,” HousingWire Lead Analyst Logan Mohtashami said.
The savings between different extended terms also diminish with length.
The difference in monthly payments between a 40-year and 50-year mortgage on a $500,000 home would only be about $86, while significantly extending the debt obligation.
Lenders could potentially offer 50-year mortgages as non-qualified mortgage products, but these typically come with higher interest rates to offset the increased risk, potentially negating some of the affordability benefits.
Mr Mohtashami emphasised that housing markets need to balance naturally through slower price growth and wage increases.
“To add another subsidisation to the market just prevents that healing process from occurring, which also prevents less equity build out as well. So I am not a fan of any increasing in the amortisation, the 30-year fixed is perfectly fine as is,” he said.
“Additionally, a 50-year mortgage is currently illegal under the qualified mortgage law, so that would have to change as well.”
