In a new development that could reshape the U.S. mortgage landscape, the Federal Housing Finance Agency (FHFA) has issued a directive requiring Fannie Mae and Freddie Mac to recognize cryptocurrency holdings as borrower assets in single-family mortgage risk assessments. This unprecedented step marks a significant evolution in the treatment of digital assets within traditional finance, signaling that crypto is moving from the margins into the core of the American financial system.
The directive not only expands the types of assets that can be considered in mortgage applications but also legitimizes cryptocurrency as a viable reserve asset, provided certain safeguards are in place. For crypto holders hoping to purchase a home without liquidating their digital portfolios, this could be the change they’ve been waiting for.
Understanding the FHFA’s New Policy
The FHFA, which oversees Fannie Mae and Freddie Mac (the two largest government-sponsored mortgage enterprises in the United States) has formally instructed both organizations to treat certain cryptocurrency holdings as part of a borrower’s financial reserves. This change applies specifically to single-family mortgage underwriting, which determines whether an applicant qualifies for a home loan based on income, creditworthiness, and asset holdings.
Traditionally, only cash or assets converted into U.S. dollars could be counted toward these reserve requirements. Crypto, due to its volatility and perceived risk, was excluded unless it had first been sold and converted into fiat currency. The new directive eliminates this barrier, allowing borrowers to count cryptocurrency holdings without needing to convert them into dollars.
No More Forced Conversions
One of the most significant changes introduced by the FHFA is the removal of the requirement for crypto to be liquidated or converted into U.S. dollars to be considered. This is a major development for crypto investors, many of whom would otherwise be forced to sell their holdings, potentially triggering capital gains taxes and disrupting long-term investment strategies, just to qualify for a mortgage.
Under the new policy, if a borrower holds Bitcoin or select other cryptocurrencies on a regulated, U.S.-based exchange, those holdings can now be counted as part of the reserve assets used to assess their mortgage application. This flexibility provides borrowers with more financial autonomy and helps ensure that digital wealth is not unfairly excluded from financial assessments.
Eligibility and Custody Requirements
Not all crypto holdings will qualify under this new directive. To mitigate risks and ensure regulatory oversight, the FHFA requires that only cryptocurrencies held on U.S.-regulated, centralized exchanges can be considered. This excludes any assets held in self-custody wallets, on decentralized platforms, or with offshore exchanges.
By limiting eligibility to assets custodied on regulated platforms, the FHFA aims to ensure that the funds are verifiable, legally compliant, and less susceptible to fraud or sudden inaccessibility. Borrowers will likely need to provide documentation confirming the existence and value of their crypto assets, along with proof that the assets are held on approved exchanges.
#BREAKING: 🇺🇸 The Federal Housing Finance Agency (FHFA) will allow your crypto to back your mortgage. 🥂 pic.twitter.com/oIoQSLVT5H
— Subjective Views (@subjectiveviews) June 25, 2025
Managing the Volatility of Digital Assets
While the FHFA’s directive is a progressive step forward, it is not without caution. Cryptocurrency is inherently volatile, with values that can fluctuate dramatically over short periods of time. To address this, the directive includes strict requirements for risk mitigation.
Fannie Mae and Freddie Mac must implement strategies to adjust the weight or value of cryptocurrency holdings based on their volatility and their proportion within a borrower’s overall asset profile. For instance, a borrower holding a large percentage of their reserves in crypto might face stricter evaluation criteria than someone with a more diversified portfolio. These measures ensure that the enterprises remain financially prudent while embracing new forms of wealth.
In addition, both enterprises must obtain approval from their internal boards before submitting their final implementation proposals to the FHFA. These proposals must demonstrate how each organization plans to account for crypto volatility, verify asset custody, and manage overall risk.
Which Cryptocurrencies Are Included?
While the directive explicitly mentions Bitcoin (BTC) as a recognized asset, it leaves room for the inclusion of “select other compliant digital currencies.” Industry reports suggest that Ethereum (ETH) is likely to be accepted as well, given its widespread adoption and its current use in crypto-backed mortgage products already offered by private lenders.
However, the final list of eligible cryptocurrencies has yet to be finalized and will ultimately depend on the proposals submitted by Fannie Mae and Freddie Mac. These proposals must align with FHFA standards and meet all applicable regulatory requirements. Until the implementation process is complete, Bitcoin remains the only cryptocurrency with explicit approval, while Ethereum and a few other major coins may follow soon after.
Why This Policy Matters
This directive represents more than just an operational change, it signals a shift in how the U.S. government views digital assets. By allowing crypto holdings to be considered in mortgage assessments, the FHFA is formally acknowledging that cryptocurrency is a legitimate part of the modern financial ecosystem.
The change could have far-reaching implications for prospective homeowners, especially younger, tech-savvy individuals who may have built significant wealth through crypto investments but struggle to meet traditional financial metrics. With this policy in place, those individuals now have a clearer path to homeownership without being penalized for how their wealth is stored.
From a broader perspective, the directive aligns with ongoing efforts to position the United States as a global leader in cryptocurrency innovation. FHFA Director William Pulte emphasized that the move supports the former Trump administration’s vision of making the U.S. the “crypto capital of the world.” By integrating crypto into the housing finance system, the U.S. is taking steps to modernize its financial infrastructure and stay ahead in the race for global fintech dominance.
What Comes Next?
While the FHFA directive is now in place, the practical implementation will take time. Fannie Mae and Freddie Mac are required to develop detailed frameworks outlining how they will integrate crypto into their underwriting processes. These proposals must then be reviewed and approved by the FHFA before the policy can be operationalized.
Some questions still remain. For example, will income from crypto staking or mining be considered in future underwriting decisions? Could other digital assets such as stablecoins or tokenized securities eventually be included? And how will the enterprises ensure real-time accuracy of crypto valuations during periods of extreme market volatility?
These are important considerations that will likely be addressed in future guidance and regulatory updates. But for now, the message is clear: crypto has earned its seat at the table in U.S. housing finance.
Conclusion
The FHFA’s new directive requiring Fannie Mae and Freddie Mac to recognize cryptocurrency as borrower assets in mortgage risk assessments marks a watershed moment in the convergence of traditional finance and digital assets. By allowing crypto held on regulated U.S. exchanges to count toward mortgage reserves without the need for conversion to dollars, the policy removes key barriers for crypto holders looking to buy a home.
Though implementation details are still being finalized, this directive sends a powerful signal: cryptocurrency is no longer an outsider in the financial world. It is a growing part of America’s economic fabric and now, officially, part of its path to homeownership.
