07-01-2025 
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William Pulte, director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, the government-backed companies that buy most of the mortgages lenders make, has issued a directive requiring the two agencies to consider digital currency as an asset for single-family home loans.
How digital assets will impact mortgage applications
So, what does it mean for “cryptocurrency” to be treated as an asset in the mortgage process? It means that homebuyers could potentially list their crypto holdings alongside traditional assets like cash and stocks when applying for a mortgage.
Before this directive, evaluating a borrower’s financial profile was relatively straightforward. Lenders primarily looked at income, credit history, and traditional assets like cash sitting in a bank account or stocks held in a brokerage account to decide whether someone qualified for a loan.
Those assets were favored because they’re easy to verify, quick to liquidate, and relatively stable in value; those three elements are crucial since the entire lending system is built around assessing how likely a borrower is to keep making payments over time. That being said, lenders want a clear picture of what the borrower owns and how quickly those resources can be converted into dollars if something goes wrong and they need to pay a debt.
Anything that introduces uncertainty into this equation, whether it’s a volatile asset or unclear documentation, usually gets set aside or heavily discounted in the underwriting process, which is why digital currencies historically did not count as a listed asset in the eyes of lenders.
Digital currencies are notorious for their volatility, which places them into the “introduces uncertainty” bucket when it comes to listed assets. This is why crypto hasn’t been considered in the mortgage underwriting process to date, as its risk profile is fundamentally different from the traditional assets lenders prefer.
Because crypto prices can swing wildly in a matter of hours, underwriters have seen it as an unreliable source of repayment.
Another big obstacle was proving ownership. Lenders have to confirm that applicants truly own the assets they claim, and with crypto, that’s not always simple. Sometimes, all a borrower has is a wallet address that they say belongs to them, and verifying that they are the owner of the wallet and the assets inside the wallet can be difficult.
When you factor in the volatility and ownership challenges, it’s easy to see why crypto has lived outside the bounds of what mortgage lenders have considered safe and predictable enough to count. However, with the FHFA’s directive on the table, that could soon change.
How the new crypto mortgage rules will work in practice
According to the order, Fannie Mae and Freddie Mac will only consider cryptocurrency assets that can be verified and stored on U.S.-regulated centralized exchanges. Borrowers won’t need to convert their crypto into dollars before closing; proving that they are the owner of the coins and tokens inside a wallet will be enough. The heavier lifting will come from the lenders, who will be required to apply adjustments for volatility when factoring crypto into their approval process. On top of that, lenders must document the risk factors tied to using digital assets as reserves.
But before any of this goes into effect, each entity must create a formal proposal for the FHFA outlining exactly how crypto assets will be assessed, valued, and incorporated into their existing risk models. These proposals must be approved by their boards of directors and then submitted to the FHFA for final review before applicants get the green light to list crypto holdings and lenders can factor them into their calculations.Will crypto mortgages change the housing market
If the directives are approved, it will be a big benefit for homebuyers holding crypto assets. They won’t need to liquidate their holdings just to have them count in their financial profile, which could mean that they’ll become eligible for a larger loan than they would otherwise be able to obtain. This could also have a positive effect on the housing market, with more people qualifying for mortgages, thanks to their crypto reserves.
But if that happens, it’s unlikely to move the needle in any significant way. The population of crypto holders in the U.S. is still a relatively small slice of the overall market, and that population becomes even smaller when you consider (1) the number of people who have enough crypto to materially change their loan eligibility (having anything less than five figures worth of crypto is unlikely to have a significant impact on loan eligibility), and (2) the overlap between that group of people and those who are in the market for a new home right now.
When you drill into that subset, the population is so narrow it’s hard to imagine this causing a noticeable spike in home sales.
Regardless of whether this ends up moving the housing market, it should still be seen as a big win for crypto. The fact that the FHFA is formally requesting that cryptocurrency be treated as an asset in mortgage underwriting is another testament to crypto’s maturity and how it’s becoming more integrated into the traditional financial system.
Watch: History of Bitcoin with Kurt Wuckert Jr.
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