The Trump administration is dropping its efforts to push for 50-year mortgages as a strategy to encourage affordable homeownership.
In November, Federal Housing Finance Agency Director Bill Pulte encouraged President Trump to float the idea for the 50-year mortgage. But after a backlash from many conservative allies and no great support from the financial services industry, Pulte bluntly announced the proposal was off the table.
“I think we have other priorities,” Pulte told reporters on Friday when asked about the proposal.
Politico is reporting that the White House is drafting an executive order focused on affordable homeownership that include changing regulations that would enable consumers to tap into their retirement and college savings accounts to cover down payment costs. Last week, Trump announced he was “immediately taking steps to ban large institutional investors from buying more single-family homes,” but he also acknowledged that plan would need congressional approval to take effect.
“…an executive order focused on affordable homeownership that include changing regulations that would enable consumers to tap into their retirement and college savings accounts to cover down payment costs.”
Yes, never think of actually increasing the median wages of Americans, just keep forcing them to spend their savings, even as corporations have nearly stopped pensions and forced employees into 401ks (which they can then turn around and take money away from instead of saving for).
All from the same people that also want to get rid of Social Security (remember THAT??) and defund or eliminate every other safety net the government is supposed to provide (so we can fund bailouts to farmers in other countries after tariffs killed our OWN farmers first).
Fifty year mortgages were never a good idea. Just another boondoggle for builders and lenders and REIT managers. Terrible for average humans. Only took them a year to figure out what sane, ethical people knew in the first place.
Agreed!
I laughed when first reading about the 50 yr mortgage. Borrower would never get out of mortgage payments plus the amortization time allows for a huge amount of interest is paid over time. Many borrowers struggle to handle a 30 yr mtg. This idea was DOA.
I don’t think there was a single large lending institution that was in favor of this. It was just another shoot from the hip statement that sounded good in his own mind without vetting to any staff.
Currently you can get a 30 year mortgage or a 15 year mortgage so why not a 50 mortgage? That would add “affordability” to buying homes and would help many Americans purchase and own the “American Dream.”
That would also be good for Seller’s!
And while we are on the topic of doing things that would be good for the Country, let’s not forgive “student loans” but instead make them much more affordable by reducing the payments, time to pay, etc, etc.
Let’s instill some financial responsibility into the minds of our younger generation instead of giving them a “free lunch” or a ‘free ride”.
On a 50 year mortgage, the average borrower will save about $75 to $110 a month. Not really an amount that’s going to have buyer’s jumping into the market. And with so much upfront interest, it would take forever for a buyer to gain any equity.
Amen!!
spot on!!
There should be some limits on large owners (say over 20 single-family homes) in purchasing homes for rent in times of scarcity. There should be fewer, or no limits in times of over-supply of homes for sale. In times of scarcity, large owners in that submarket should be incented to sell homes to owner occupants. The situation needs to be separately evaluated for each sub-market in which large owners want to acquire existing homes…. which makes it more challenging to implement.
Home ownership, including single family, condo, co-ops etc. with modest initial downpayments should be encouraged, short of fraudulent loans etc., as it is for many Americans their “skin in the economic game”. All citizens should be encouraged and have a chance at homeownership. Recent statements by Blackrock/Blackstone et. al. are mostly crocodile tears.
Similarly, I support the federal government holding some mortgages of longer than 10-year maturity, for relatively short periods of time, similar to QE. Coordination between the Fed and the Administration would be helpful. I could support a 40-year mortgage term also; 50 years is too long. I could support, a return of some, not all, assumable mortgages, and perhaps some mortgages that move, as the homeowner may move, provided that there are significant, progressively lower loan to values over time.
I could also support longer term Treasury bonds, when it is advantageous for the government to do so….. which should have been done 2010 – 2021. All of this also requires careful attention to inflation, deficit, yield curve etc.
There should be some type of financing available for people to purchase a property that needs work. The rehab loans are too difficult for 1st time home buyers. They are more suited for investors.
Interesting to see what various solutions to
providing access to home ownership are being put forth . Longer term amortization , grants for down payments, tapping 401k funds, etc.
A comparison of rent vs buying ultimately may resemble what we’ve witnessed with the automobile industry. There was a time when leasing a car was not that common and now a major sector is doing that. Penalizing or restricting the Corporate ownership of homes seems like restricting a supply of homes available to tenants that prefer leasing to ownership . A component that could further justify someone that wants to rent vs buy for several reasons would to be allowing some deductibility for lease payments. If housing affordability is a goal that seems to be a possible consideration. The ideas for home ownership to build equity ultimately gets down to “after tax” cost of rent vs buying.
Lots of people don’t need to be home owners
Just like not bring married to have children.
Times of commitment are changing and maybe some people are better off renting if some tax benefits are provided to them.
Just saying….,.
NOOOOO. DROP THE PRICES!!!!
In my opinion the main problem is interest rates. We need to have rates at around 3% or 4%.
One big solution could be to invest the social security fund be the lender. The social security funds earns from 2 to 3 % interest. Why not make it a solid 4%. This will save the social security and allow for home ownership. Regulations will have to be established to ensure that the best loans are financed via social security.
Another option is to have the Federal Government do the loans directly and using another driver instead of the Federal Reserve rates that increase so much. The Federal Government via FHA guarantees these loans, the banks are safe, the borrower pays mortgage insurance and still, the rates fluctuate so high. Get the middleman out, get the banks out of the equation or force them to use a different driver and earn a fixed loan management fee.,
I could offer more ideas if asked.
How about raising the federal minimum wage so that people who work full time at that rate of pay are not stuck in poverty? Keeping the minimum wage so low is legalized slavery.