New 50-Year Loan Talk: What It Could Mean for Buyers & Prices

Hello everyone! From 50-year loans to scrapping credit score minimums, stimulus buzz, and a possible shutdown resolution—there’s a lot . Here’s what matters and why. Let’s dive in.

Read time: ~4 minutes

Rates ended FLAT compared to last week, and volatility was MODERATE. Rates are in the low to mid 6’s for most loan types without paying discount points. Paying discount points can get you in the low 6’s to the high 5’s.

Affordability Crisis is Now a National Priority

Back in 1980, the average first-time homebuyer was just 28 years old. Fast forward to today — that number has climbed to 40 years old, the highest on record. Only 21% of home purchases this year came from first-time buyers — the lowest share since 1981.

For those of us who work closely with first-time buyers, this hits home. Rising prices, higher rates, and limited inventory have pushed younger buyers further out of reach. Many are still renting or saving, waiting for the perfect combination of lower rates and affordability that just hasn’t arrived yet.

The good news? Washington is finally paying attention. In the past few weeks, we’ve seen multiple proposals focused on addressing the housing affordability crisis head-on. From new credit policy updates to discussions around longer mortgage terms, the message is clear — affordability is no longer a side conversation. It’s the conversation so lets break down what is being discussed….

🏠 Fannie Mae Drops the 620 Credit Score Rule

For years, one thing about conventional loans has been consistent: you needed at least a 620 credit score to qualify. That benchmark just changed.

Starting November 16, 2025, Fannie Mae announced it will no longer require a minimum credit score for loans run through its Desktop Underwriter (DU) system. Instead of relying on a single number, DU will now analyze each borrower’s entire financial profile — including income stability, debt ratios, credit history, cash reserves, and property type — to determine if the loan meets Fannie Mae’s risk standards.

What This Means for Borrowers:
This is not a free pass for low-score borrowers, but it does open a new door for people who have solid finances in other areas. If you have a large down payment, consistent income, and low overall debt, you may now qualify for a conventional loan — even if your score is below 620.

That’s a big deal because, previously, anyone under 620 was pushed toward FHA loans, which require mortgage insurance premiums (PMI). Under this new change, well-qualified buyers with larger down payments could access conventional financing without PMI, potentially saving thousands over time.

What This Means for the Housing Market:
This move could expand access to conventional lending for responsible borrowers who were previously sidelined by credit scoring models — especially first-time buyers or those rebuilding after financial setbacks. But it won’t flood the market with risky loans. DU still applies a strict automated analysis, and most low-score buyers with small down payments won’t qualify.

Why Fannie Mae Made the Change:
The goal is to make credit assessments more equitable and data-driven. A single score doesn’t always tell the full story — especially for those with limited credit history but strong financial behavior in other areas.

📊 New 50-Year Loan Talk: What It Could Mean for Buyers & Prices

This weekend, social media was buzzing over talk of a 50-year mortgage. The idea drew plenty of attention — but the odds of it actually being approved are extremely slim. And even if it were, no one would be required to take one.

Yes, stretching a loan to 50 years would lower the monthly payment — but it comes at a huge cost over time. Let’s break it down:

• A $400,000 loan at 6.5% for 30 years has a principal and interest payment of about $2,528, with total interest paid around $510,000.

• Stretch that same loan to 50 years, and the monthly payment drops to roughly $2,266 — only about $262 less per month — but total interest skyrockets to $959,000.

That’s nearly double the lifetime cost of the home.

And that’s assuming the rate stays the same — which is unlikely. Longer loan terms are riskier for lenders, meaning they’d almost certainly charge a higher interest rate. Without government subsidies to offset that risk, the savings could shrink fast, barely moving the needle on affordability.

If anything, this idea highlights the real issue: housing costs are simply too high. Instead of creating more debt stretched over time, we need more affordable housing built — homes that everyday buyers can actually afford.

In my opinion, extending debt doesn’t solve the problem; it just delays it. We don’t need more years added to our mortgages — we need solutions that bring prices and supply back into balance.

💸 Stimulus Checks Are Back? What It Could Mean for Rates

President Trump recently announced what he’s calling a “tariff dividend” — a direct payment of at least $2,000 per American, aimed to reach about 85% of U.S. adults, totaling more than $400 billion in payouts.

A sudden cash injection like that definitely grabs attention. Who wouldn’t enjoy seeing an extra $2,000 hit their bank account? But while the short-term boost sounds great, the long-term impact could be a different story.

If this “stimulus 2.0” fuels higher inflation or adds to the national debt, we could see mortgage rates climb as a result. History shows that when inflation heats up, the Federal Reserve tends to step in with rate hikes to cool things down — which can quickly offset the short-term benefit of extra cash in people’s pockets.

So while this payout could help consumers now, it might also make borrowing more expensive later. As always, it’s smart to look beyond the short-term excitement and plan ahead for how these broader economic moves might affect your clients’ buying power.