The Federal Housing Finance Agency (FHFA) issued a directive requiring Fannie Mae and Freddie Mac to develop proposals for incorporating cryptocurrency into single-family mortgage loan risk assessments.
By incorporating cryptocurrencies into loan risk assessments, the FHFA hopes to help the government-sponsored enterprises (GSEs) better evaluate borrowers’ financial profiles and to promote sustainable homeownership.
The June 25 order, signed by FHFA Director Bill Pulte, instructed the GSEs to evaluate the risks associated with allowing loan borrowers to use virtual currencies in real estate transactions without requiring the digital assets to be converted to U.S. dollars.
“After significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage,” Pulte wrote on X (formerly Twitter).
Historically, cryptocurrency has not been considered in the mortgage underwriting process unless converted to U.S. currency before closing. The directive comes amid increased attention to digital assets as an emerging source of personal wealth aside from traditional investment asset classes.
Under the directive, each enterprise must consider only digital assets that are evidenced and stored on a U.S.-regulated centralized exchange and subject to all applicable laws. They also must develop procedures for mitigating risks associated with cryptocurrency holdings, such as price volatility. This includes incorporating asset-specific risk adjustments in their reserve requirements.
Fannie Mae and Freddie Mac must submit proposals outlining how they will evaluate cryptocurrency assets within their risk assessment frameworks. Any changes must be approved by each GSE’s board of directors, then submitted to the FHFA for final review.
The order does not include a specific deadline for these proposals but stipulates that the directive was to become “effective immediately” and “should be implemented as soon as reasonably practical.”