When Jim Erbach set out to refinance his mortgage this year, his credit union told him about a new kind of loan that would cut his monthly payments by nearly $200.

"I'm cheap," admitted Erbach, who signed onto a 40-year mortgage. "I have one objective in mind: Reduce the current costs of my expenses."Erbach, 73, is a retired fleet manager who lives on a fixed income.

He is in a pilot program to test consumer reaction to a relatively rare mortgage animal: the 40-year fixed rate loan.

It's an experiment of 16 credit unions nationwide in partnership with Fannie Mae, which next year will decide whether to roll out the loans on a broad scale.

Although a few banks offer the occasional 40-year fixed rate on a customer-by-customer basis, a stamp of approval from Fannie Mae could standardize such loans.

The 40-year loan may turn more Americans into homeowners. But critics say they'll give more nightmares to people already saddled with debt.

"I thought the point of buying a home was to own it," complained Amelia Tyagi, co-author of "The Two-Income Trap," an examination of debt. "With this thing, you pay until you die." She regards the concept as "almost criminal."

"Sending the message that it's acceptable not to get that thing paid off for 40 years, that's a dangerous message," she said. "What happens if your roof springs a leak? What if you get laid off?"

Robert Manning, a professor of finance at the Rochester Institute of Technology, says Fannie Mae's efforts to expand ownership could end up having the opposite effect. Putting more cash into the hands of first-time buyers, he says, enables them to drive up prices.

"You're bringing more people into the market who shouldn't be there," he said. "It makes it more unaffordable for those who want to do the right thing and save for a down payment and get a mortgage that's a realistic length."

A generation ago, the 20-year mortgage was the only game in town. Now there are dozens of ways to borrow.

The 40-year loans are easier to qualify for than 30-year loans, and borrowers can get bigger loans than with the 30-year deals.

And remember: You don't have to keep the loan the whole 40 years. Erbach says he plans to sell in five or 10 years. "But my mother lived to be 100," he says. "Who knows?"