Growing Equity Mortgage (GEM)
Michael R. Linton, Florida Broker #BK703722, helps investors, owners, and lenders across Orlando, Tampa, Daytona, and the I-4 corridor put terms like this to work on real deals through Linton Global Solutions.
A growing equity mortgage (GEM) is a fixed-rate loan whose payments increase on a set schedule, with every increase going to principal, so the loan is paid off well ahead of its stated term.
A GEM builds equity fast by design. The interest rate stays fixed, but the payment steps up each year and the extra goes straight to principal. It's the opposite of a graduated payment mortgage, where low early payments can make the balance grow.
How It Works
- Fixed interest rate.
- Payments rise by a set percentage each year.
- The increase reduces principal, shortening the payoff.
- No negative amortization.
- FHA's Section 245(a) program has included GEMs.
Investor Perspective
Faster equity build lowers risk at refinance, but rising payments reduce cash flow. Many investors get the same result more flexibly with a standard loan and voluntary principal prepayments, if the loan allows them without a penalty.
A Hypothetical Port Orange Example
A buyer of a duplex in Port Orange compares a GEM with a 30-year fixed loan. In this example, the GEM's payment rises each year and the loan is projected to pay off years early. The buyer prefers the 30-year loan with optional extra payments, keeping flexibility if a unit sits vacant. Hypothetical scenario.
From the Desk
Paying down debt faster is good. Being forced to, when a tenant leaves, is less good.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39+ years of experience closing commercial real estate transactions across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Growing Equity Mortgage (GEM) Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years of closed Florida CRE transactions with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What is a growing equity mortgage?
A fixed-rate loan with scheduled payment increases applied to principal.
Does a GEM have negative amortization?
No. Rising payments reduce principal faster.
How is it different from a GPM?
A GPM's low early payments can grow the balance; a GEM shrinks it faster.
Does the rate change?
No. The rate is fixed; only the payment rises.
Is there an alternative?
A standard loan with voluntary prepayments, if allowed.
Article Summary
A GEM steps up payments and applies the increase to principal, paying the loan off early at a fixed rate.
Key Takeaways
- ✓Fixed rate.
- ✓Payments rise on schedule.
- ✓Increases go to principal.
- ✓Pays off early.
- ✓Less flexible than voluntary prepayment.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
Ready to Talk About Your Growing Equity Mortgage (GEM) Deal?
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Schedule a Free ConsultationWorks Cited
- U.S. Department of Housing and Urban Development. "Section 245(a) Graduated Payment and Growing Equity Mortgages." HUD, https://www.hud.gov/program_offices/housing/sfh/ins/245--df. Accessed Oct 4, 2026.
- Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 4, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.