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Will the FHA Introduce a 40 Year Mortgage?

In many respects, the COVID-19 pandemic appears to moving optimistically toward its end, with many aspects of American’s life returning to more normal activities. Nevertheless, some American homeowners who were severely impacted by the shutdowns, and were able to take advantage of the forbearance, are still climbing their way out of the financial challenges.

As these homeowners exit forbearance, the Federal Housing Administration wants to help them navigate the next phase. In an article published by, information about an FHA program where an option to enter a 40 year loan modification with partial claim is described. Reporter, Flavia Furlan Nunes states, “In September, the FHA posted a draft mortgage letter proposing a 40-year loan modification combined with a partial claim. The goal is to help borrowers reach the targeted reduction of 25% of the monthly principal and interest portion of their mortgage payments.”

It goes on to detail a proposal from Ginne Mae (Government National Mortgage Associate- GNMA), to introduce a 40 year mortgage. Michael Drayne, Ginnie Mae acting executive vice president, explains, “We have begun the work to make this security product available because an extended term up to 40 years can be a powerful tool in reducing monthly payment obligations with the goal of home retention.” This offer would follow a loan modification term of 40 years already offered by Fannie Mae and Freddie Mac.

Read the entire article for more information about the programs and how homeowners have fared in paying some of their mortgage payments during forbearance.


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