Fannie Mae Breaks Tradition: Crypto-Backed Mortgages Are Coming

Federal Housing Finance Agency Director Bill Pulte has instructed Fannie Mae and Freddie Mac to draft proposals allowing cryptocurrency holdings to count as mortgage reserves without requiring conversion into U.S. dollars.

The directive marks a major departure from current rules, where borrowers must liquidate crypto assets before they can be considered in loan approvals.

Fannie Mae Breaks Tradition: Crypto-Backed Mortgages Are Coming — What Does It Mean for Housing?

Given that Fannie Mae and Freddie Mac guarantee more than half of all U.S. mortgages, the move could reshape underwriting standards across a significant portion of the housing market.

Under the proposal, reported by the WSJ, only crypto held on U.S.-regulated exchanges such as Coinbase would qualify. Lenders would also apply adjusted valuations to account for volatility, a key concern among regulators and lawmakers.

The change could unlock homeownership for a new class of borrowers, particularly those who are asset-rich but cash-poor, by allowing them to leverage holdings in assets like Bitcoin and Ethereum without triggering taxable sales.

Private lenders are already moving in this direction. Firms like Newrez and Rate have launched non-agency mortgage products that accept crypto for qualification, including Bitcoin, Ethereum, and even SEC-approved spot ETFs and stablecoins.

Still, the policy faces scrutiny. Democratic lawmakers have raised concerns about the risks volatile digital assets could pose to the broader housing system.

Meanwhile, Senator Cynthia Lummis has introduced the 21st Century Mortgage Act, aiming to codify the FHFA’s directive into law.

The push aligns with broader political ambitions, including President Donald Trump’s stated goal of making the United States a global crypto hub.

With the crypto market now valued at roughly $2.4 trillion and adoption surging among younger investors, the integration of digital assets into mortgage underwriting may be less a question of “if” and more of “when.”