While the mortgage industry has historically treated cryptocurrency holdings with all the enthusiasm of a Victorian banker encountering a debit card, the Federal Housing Finance Agency has issued a directive that may finally drag home lending into the digital asset era.
FHFA Director William Pulte has ordered Fannie Mae and Freddie Mac to develop proposals allowing cryptocurrency holdings to be directly assessed in mortgage risk evaluations—without the previously mandatory conversion to U.S. dollars.
This represents the first formal integration of digital assets into American housing finance underwriting, a development that would have seemed laughably improbable just a few years ago when Bitcoin was dismissed as digital Monopoly money.
The directive specifically covers crypto assets held on U.S.-regulated centralized exchanges, including Bitcoin, Ethereum, and Solana, provided they meet verification and secure storage requirements.
Previously, borrowers faced a particularly cruel irony: their crypto wealth existed in a mortgage qualification limbo, invisible to underwriters unless liquidated (triggering unwelcome tax consequences and liquidity challenges).
Banks, meanwhile, were hamstrung by SEC guidance SAB 121, which required crypto holdings to be treated as balance sheet liabilities—a regulatory straitjacket that made crypto-backed lending about as appealing as a root canal.
The January 2025 rescission of SAB 121 cleared this regulatory debris, enabling the current FHFA directive.
The policy aims to recognize cryptocurrency as an alternative investment comparable to traditional stocks and bonds, though one suspects the volatility comparison might favor the latter’s predictability. The broader crypto ecosystem has seen remarkable stability improvements, with stablecoin market capitalization reaching record highs of approximately $228-252 billion by mid-2025.
For borrowers, this development could substantially expand mortgage access by eliminating the forced liquidation requirement that previously penalized crypto holders.
The broader implications suggest a potential increase in qualified homebuyers, which could enhance housing market liquidity—assuming, of course, that Bitcoin doesn’t decide to take one of its characteristic nosedives during the underwriting process. Both government-controlled entities guarantee approximately half of the $12 trillion U.S. home loan market, making this policy shift particularly significant for the broader housing economy.
The FHFA maintains oversight ensuring proper vetting and regulated storage environments, incorporating volatility and custody considerations into risk assessments. Implementation will require the enterprises to develop comprehensive risk mitigation measures before gaining final approval and board review.
Whether this represents prudent financial evolution or regulatory capitulation to digital asset inevitability remains to be seen, but the mortgage industry’s reluctant embrace of cryptocurrency appears irreversibly underway.
