Can 40-year mortgages solve housing affordability?

In April, the FHA offered a 40-year loan modification program for homeowners struggling with their mortgage due to COVID-19. “It's effectively an interest-only loan with the amount that you pay to principal is so tiny and incrementally beneficial,” Scott Sheldon, branch manager at New American Funding, told Yahoo Money, “that you might as well just have an interest-only loan.” For instance, in the previous example, the total interest paid on a 40-year-old mortgage is $145,750 more than the total interest you would pay on a 30-year fixed home loan.

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