Fannie Mae and Freddie Mac Must Count Crypto Assets When Evaluating Mortgage Applications
In a landmark move for the U.S. housing sector, the Federal Housing Finance Agency (FHFA) has directed mortgage giants Fannie Mae and Freddie Mac to begin treating certain cryptocurrency holdings as valid assets when assessing home loan applications.
On June 26, FHFA Director William Pulte took to social media to announce that the order reflects the Trump administration’s broad-based efforts to engage in innovation and ensure the U.S. continues to be a leader in crypto.
Pulte posted that “part of my vision for modernizing the housing market and expanding access to homeownership, I have instructed Fannie Mae and Freddie Mac to prepare their systems to recognize cryptocurrency as a qualifying reserve asset.”
A Shift Toward Digital Financial Recognition
In history, mortgage evaluations don’t consider crypto unless they are converted into U.S. dollars. From now on, borrowers won’t have to sell their crypto so that it counts toward the mortgage. So long as the assets are held on U.S.-regulated centralized exchanges, that’s no longer required.
This shift could give buyers who deal in crypto more financial leeway; investment portfolios are already becoming more diversified through crypto assets.
Strict Oversight Still Applies
Only digital assets on compliant US-regulated platforms will be eligible, said FHFA. Crypto wallets “in self-custody” will not be covered by “update risk assessment criteria,” which is often heralded for decentralization and “privacy.”
The directive from the FHFA stated that each enterprise should only look at cryptocurrency assets that can be shown and submitted on a centralized exchange regulated in the US.
Balancing Innovation and Risk
People who supported the move said it was a big step towards legitimization of crypto, but some industry mouthpieces were concerned about limitations for asset custody. The decision is regarded as a key moment for institutional adoption of Bitcoin and digital assets by others like MicroStrategy co-founder Michael Saylor.
The new policy aims to allow banks and lenders to better assess a borrower’s financial picture. This may open the door to mortgage approvals for qualified buyers who previously relied on crypto wealth.
Next Steps for Implementation
Fannie Mae and Freddie Mac must submit a “reasonable” timeline for integrating crypto into their mortgage risk model at the direction of the Federal Housing Finance Agency (FHFA). However, a timeline for full implementation was not issued.
