Trump Pauses 50-year Mortgage Plan, Eyes 401(k)s For Down Payments

The Trump administration is backing away from a proposal to introduce 50-year mortgages, while exploring alternatives approaches to improve housing affordability, including allowing Americans to tap retirement or college savings for down payments, according to recent reports. 

In early November, President Donald Trump posted an image on Truth Social featuring a portrait of President Franklin D. Roosevelt under the title 30-year mortgage, and his own head shot under a title of 50-year mortgage. Shortly afterward, Federal Housing Finance Agency (FHFA) Director Bill Pulte confirmed that the administration was evaluating the idea, calling it a potential “game changer.”

That proposal, however, has since been shelved. Pulte told reporters Friday that the White House has put the 50-year mortgage option aside, saying, “I think we have other priorities.”

The idea drew criticism from economists and housing industry experts, who warned that while longer amortization periods could lower monthly payments, they would also slow equity accumulation and raise legal and regulatory hurdles. Current qualified mortgage rules do not permit 40- or 50-year fixed-rate loans.

The administration is now focusing on other policy options to address affordability. According to a Politico report citing two people familiar with the drafting, the White House is preparing an executive order that would allow Americans to use funds from 401(k) or 529 accounts for down payments without triggering the penalties typically associated with nonqualified withdrawals.

The White House did not immediately respond to HousingWire’s request for comment.

The same executive order would also include a proposal to bar large institutional investors from purchasing single-family homes — an idea Trump promoted on social media last week, the report said.

“President Trump pledged to put an end to Joe Biden’s inflation and affordability crisis, and the Administration is constantly exploring new policy actions to do just that,” White House spokesperson Kush Desai said in a statement to Politico. “Until policy announcements are officially made by the Administration, however, any reporting about potential action is pure speculation.”

Separately, Trump has directed his appointees at Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS), stepping into a market the Federal Reserve has decided to largely exited. Trump’s move briefly pushed mortgage rates below 6% on Friday for the first time in nearly three years.