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  • Writer's pictureMike Roberts

Federal Government Extending Certain Mortgages to 40 Years

If you are a homeowner behind on your mortgage payments, you may be able to extend the term of your mortgage to 40 years under a federal program that began May 8, 2023.

The Department of Housing and Urban Development (HUD) will allow homeowners who are behind on payments on their Federal Housing Administration (FHA) loans because of financial difficulty to reset the terms of those loans to 40 years. By extending the term of the loan, the new program will lower monthly payments, making it easier for these homeowners to avoid foreclosure.

Follow-up to mortgage forbearance

This program comes on the heels of the 2020 mortgage forbearance relief offered under the CARES Act, which was enacted when the Covid-19 pandemic caused businesses to shut down and lay off employees. Over 7 million homeowners entered forbearance under that program.

The economy is recovering from the pandemic, but millions of homeowners with mortgages still need help. The 40-year reset is designed to help homeowners stay in their homes and get back on a solid financial footing.

Who qualifies?

This new program does not apply to new mortgages for purchasing a home. It is a loan modification designed for homeowners with an FHA loan who are experiencing financial distress. You must meet these qualifications:

  • You must be experiencing financial hardship or circumstances that will lead to it.

  • You must not be eligible to refinance.

  • You must be behind on mortgage payments.


Homeowners interested in this program should deal only with a legitimate mortgage lender with a good reputation, starting with the lender holding their current note. Avoid organizations advising you to purposely miss payments you can afford to make to qualify for this modification plan. Because missing a payment will damage your credit rating, you should apply for this program only if you are already unwillingly behind on payments.

Carefully evaluate the terms of the modification program. Keep in mind that extending to a longer mortgage term will increase the number of years you are charged interest and, therefore, will increase the total amount you pay over the life of the loan.

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