FHFA Directs Fannie Mae and Freddie Mac to Evaluate Crypto Assets in Mortgage Risk Assessments

The U.S. Federal Housing Finance Agency (FHFA) has instructed Fannie Mae and Freddie Mac to develop proposals for including cryptocurrencies in their mortgage risk assessments. This move could allow potential homebuyers to use crypto holdings as reserves when applying for a loan—without needing to convert those digital assets into U.S. dollars. FHFA Director William J. Pulte issued the directive via letter on Wednesday, asking both government-sponsored enterprises (GSEs) to explore how digital currencies might be treated as part of single-family mortgage loan assessments. The letter calls on Fannie Mae and Freddie Mac to “prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion of said cryptocurrency to U.S. dollars.” Historic Shift in Mortgage Criteria This order marks a significant departure from traditional mortgage qualification standards, where crypto assets have typically been excluded unless liquidated into fiat currency. The FHFA has overseen Fannie Mae and Freddie Mac since the 2008 financial crisis, when both entities were placed under federal conservatorship. Since then, the two have provided vital liquidity and stability in the housing market by purchasing loans from lenders, allowing banks to issue more credit. By considering crypto as part of a borrower’s financial profile, the FHFA aims to modernize underwriting practices in line with broader digital asset adoption. Aligning with Pro-Crypto Policy Goals In a post on X, formerly Twitter, Pulte emphasized that this decision was made “after significant studying” and aligns with former President Donald Trump’s ambition to establish the U.S. as the “crypto capital of the world.” The directive also includes a condition: only cryptocurrencies that are “evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws” will be eligible for consideration. This restriction is designed to ensure compliance and reduce risks associated with unregulated crypto markets. Broader Acceptance of Crypto in Finance The FHFA’s order reflects a broader trend of digital assets becoming more integrated into mainstream financial practices in the United States. Recent reports from Cointelegraph note that JPMorgan plans to allow select wealth management clients to use crypto-backed products, such as Bitcoin ETFs, as collateral for financing. In another development, Circle’s USDC stablecoin will soon be eligible collateral for futures trading, through a collaboration between Coinbase Derivatives and Nodal Clear. Crypto-backed mortgage lending, though still niche, has already begun to emerge. Mauricio Di Bartolomeo, co-founder of Bitcoin lending platform Ledn, told Cointelegraph that many Bitcoin holders are using digital assets to secure real estate loans without selling their crypto. “Bitcoin holders have used their digital assets as collateral to purchase real estate,” he said. As digital finance continues to evolve, this latest FHFA move signals a shift in how traditional financial institutions might assess and interact with cryptocurrencies going forward.