John Hope Bryant’s Vision for 40-Year Mortgages
John Hope Bryant, who once led the largest minority-controlled owner of single-family rental homes in the U.S. and served as an advisor to two presidential administrations, is now focused on expanding economic opportunities through his nonprofit, Operation HOPE. Bryant is advocating for the introduction of 40-year mortgages as a new standard for first-time homebuyers.
The Proposal
The concept came to Bryant during an interview, and while he’s not the first to suggest a 40-year mortgage, he believes he’s the first to structure it in this specific way. His proposal includes a 40-year mortgage with a subsidized interest rate ranging from 3.5% to 4.5%. To qualify, buyers would need to complete financial literacy training, and the subsidies would be capped at $350,000 for rural areas and $1 million for urban areas. Importantly, there’s no age limit—Bryant believes that even a 45-year-old who has been renting their entire life should have the opportunity to buy their first home and start building generational wealth.
“Why discriminate against somebody because they’re older? That’s crazy,” Bryant said. “Let them buy that house just like a 20-year-old would, and who knows? Maybe they’ll surprise us and live to 100.”
The Rationale
For Bryant, a 40-year mortgage offers lower monthly payments on an appreciating and assumable asset at a time when many people can’t afford to buy a home. He points out that the 30-year mortgage was a product of the Great Depression and argues that it’s time for an upgrade. The U.S. currently faces a significant housing crisis, with high home prices and mortgage rates, compounded by a lack of housing supply due to years of underbuilding and policy failures. The “lock-in effect,” where homeowners are hesitant to sell due to rapidly rising mortgage rates, is also exacerbating the problem.
The housing market has always experienced cycles of booms and busts, and in the current cycle, the lock-in effect has contributed to existing-home sales falling to their lowest point in nearly 30 years, driving up the value of existing homes. While it might seem that a 40-year mortgage could worsen this issue, Bryant argues that it would only do so in the absence of additional housing inventory. “The 40-year mortgage, in and of itself, is a Band-Aid … The surgery that fixes this problem is long-term inventory,” he said.
The Bigger Picture
Although housing inventory has increased this year compared to last, it’s still far from what’s needed to resolve the housing shortage. Therefore, the 40-year mortgage would need to be implemented alongside efforts to increase housing supply.
Admittedly, the idea of a 40-year mortgage can be intimidating. The thought of being in debt for four decades might be unsettling, but Bryant points out that many millionaires and billionaires have accumulated wealth through what he calls “good debt.” He doesn’t see a better solution on the horizon.
“Does the market have a better idea for solving affordability and broad access, still rooted in free enterprise and capitalism?” he asked. “We’re not talking about socialism or communism or some crazy stuff … If somebody has a better idea, I’m all ears. I’m sure that when car loans went from three-year and four-year terms to four- to eight-year terms, people thought that was crazy too.”
Bryant also emphasized that we shouldn’t let the perfect be the enemy of the good. While building more homes is the ideal solution, it takes time. In his view, a 40-year mortgage could offer people a chance at the American dream now.
Although he didn’t provide many details, Bryant mentioned that he has already shared the idea with senior officials in the federal government, and “they did not say it was crazy,” he added.
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