- Federal Housing Finance Agency (FHFA) Director Bill Pulte directs mortgage institutions to recognize cryptocurrency holdings as assets in mortgage applications.
- This directive is a notable reversal from earlier guidance from the Biden administration.
- Housing Policy Expert Lisa Hartwell warned the move could introduce new risks.
- The FHFA’s new stance is expected to ripple through the broader mortgage and banking sectors.
In a policy shift that will likely be embraced by Americans, the Federal Housing Finance Agency (FHFA) of the United States has directed mortgage institutions to begin recognizing cryptocurrency holdings as assets in mortgage applications. Fannie Mae and Freddie Mac are the two largest government-backed mortgage institutions in the US.
The move announced by FHFA Director Bill Pulte on X is the first time the U.S. government has endorsed the inclusion of digital assets in federally backed home loan assessments.
Break from Previous Policy
This directive marks a notable reversal from earlier guidance issued during the Biden administration, which prohibited using cryptocurrency income for mortgage qualification due to its volatility and regulatory uncertainties.
Last month, the Trump administration also rescinded 2022 guidance issued by the Biden administration asking participants to exercise extreme caution before allowing digital assets such as Bitcoin in retirement portfolios.
Fannie Mae and Freddie Mac, which together guarantee more than half of the nation’s mortgages, had previously excluded crypto assets from loan eligibility assessments.
Under the new plan, both agencies will now draft proposals to integrate crypto asset consideration into their underwriting standards. These proposals must be reviewed and approved by their respective boards and the FHFA before implementation.
The policy could allow prospective homebuyers to leverage their digital asset portfolios without converting them into U.S. dollars, potentially easing the path to homeownership for millions of crypto investors.
Rising Housing Costs, Elevated Rates
The timing of the policy shift comes amid persistently high home prices and elevated mortgage interest rates.
In May, the median U.S. home sale price hit a record high, while borrowing costs remained above historical averages.
Allowing crypto assets to count toward mortgage qualifications could expand access to credit, particularly among younger Americans who are more likely to hold digital currencies.
However, Housing Policy Expert Lisa Hartwell warned the move could introduce new risks.
“Crypto remains an extremely volatile asset class,” she said.
“Lenders and investors will need to factor in significant market swings when assessing borrower creditworthiness and loan risk.”
To that end, Pulte’s directive instructs Fannie Mae and Freddie Mac to include “additional risk mitigants” and consider “adjustments for market volatility” in their forthcoming proposals.
What’s Next?
The FHFA’s new stance is expected to ripple through the broader mortgage and banking sectors, with government backed firms now moving to incorporate digital assets.
The policy also comes as Trump signals broader support for the crypto sector, launching his own digital token and backing crypto related ventures like World Liberty Financial, in which his family holds a stake.
Nonetheless, FHFA Director Bill Pulte said the announcement represents a significant milestone in the mainstreaming of crypto within the U.S. financial system and a potential turning point for crypto savvy Americans seeking homeownership.
“Today’s decision sends a strong message that the future of finance includes digital assets,” Pulte said.
“Fannie and Freddie are just the beginning.”
