What It Means for Apartment Owners

The proposed 50-year mortgage is being promoted as a way to make homeownership more attainable by lowering monthly payments and helping first-time buyers qualify for larger loan amounts. With the average age of a first-time homebuyer now around 40, policymakers hope that extended amortization will ease the affordability crisis and make it possible for younger buyers to enter the market sooner.

A Likely Outcome: Higher Home Prices, Not More Affordability

While lower payments seem beneficial, increasing borrowers’ purchasing power often leads to higher home prices. When buyers can qualify for more, sellers typically raise their asking prices—especially in markets where supply continues to lag. In this scenario, the increased borrowing capacity created by a 50-year loan could be absorbed by price escalation rather than improved affordability. Instead of helping first-time buyers, it may widen the gap by pushing entry-level home values even further out of reach.

Uncertainty Ahead for 2–4 Unit Multifamily Properties

The details of the 50-year mortgage proposal remain incomplete, and no definitive eligibility rules have been released. What we do know is that policymakers are framing the concept as an affordability tool for first-time, owner-occupant buyers. Under current regulations, a “qualified mortgage” cannot exceed a 30-year term, meaning any shift to a 50-year product would require regulatory or legislative changes. Early industry analysis suggests the program is likely to target owner-occupants—including those purchasing a duplex, triplex, or fourplex as their primary residence.

What remains unclear is whether non–owner-occupied 1–4 unit investment properties will be included. If the program is limited strictly to owner-occupants, investors who rely on traditional rental underwriting will see no change in financing terms, and only owner-occupant buyers will benefit. However, if eligibility eventually expands to include investors, the impact could be substantial—potentially increasing prices for small multifamily properties as buyers gain access to lower monthly payments and improved cash flow. Until the final guidelines are released, both scenarios remain plausible, and apartment owners should watch for updates closely.

Limited Effect Expected for 5+ Unit Commercial Properties

Commercial financing for 5+ unit properties is unlikely to be affected. These loans typically involve shorter amortization periods, rate adjustments, DSCR requirements, and balloon payments, all of which keep valuations tied directly to property performance rather than borrower income. Because the proposed 50-year product would not apply to commercial loans, larger multifamily buildings will remain anchored to cash flow fundamentals, while 2–4 unit properties could experience price inflation if owner-occupants or investors are granted access to longer amortization. Whether this makes 2–4 unit properties more attractive due to lower monthly debt service and higher cash flow, or makes 5+ unit properties more attractive due to more stable valuations will depend on the final structure of the program.

Conclusion: A Market Shift with Strategic Implications

The proposed 50-year mortgage is well-intentioned, but it may reshape pricing dynamics across both the single-family and 2-4 unit multifamily markets. Investors—particularly those owning or acquiring 2–4 unit rental properties—should understand how extended amortization could push prices upward, increase competition, and widen the divide between residential and commercial lending. If prices rise as a result of more borrowing power, this could create a favorable selling opportunity for owners of 2–4 unit properties.

As policymakers move forward, the structure of this program will determine whether it genuinely expands affordability or unintentionally fuels further price increases. With that in mind, what do you think—would a 50-year mortgage be a positive step for the market, and should it be extended to include 2–4 unit investment properties, or would that simply push prices even higher?

Written by Mercedes Shaffer, Real Estate Broker

Mercedes Shaffer is a multifamily broker with REAL, serving LA and Orange County. For questions about buying, selling or 1031 exchanges, contact her team at 714.330.9999, InvestingInTheOC@gmail.com, or you can visit their website at InvestingInTheOC.com BRE 02114448