Crypto's New Frontier: Fannie Mae and Freddie Mac to Factor Digital Assets into Mortgage Risk

In a landmark decision, the Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to integrate cryptocurrency holdings into their mortgage risk assessments. This move signifies a growing mainstream acceptance of digital assets and could significantly impact how potential homeowners qualify for loans, potentially broadening access to the housing market for crypto holders.

Crypto's New Role in Mortgage Lending

The FHFA, which has overseen Fannie Mae and Freddie Mac since the 2008 financial crisis, issued a directive for the government-sponsored enterprises (GSEs) to develop proposals for considering cryptocurrency as an asset for reserves in single-family mortgage loan risk assessments. Crucially, this consideration is to occur without requiring the conversion of crypto to U.S. dollars, a departure from previous practices.

This initiative aligns with a broader trend of digital assets gaining traction as legitimate collateral. For instance, JPMorgan is exploring the use of crypto-based products as collateral for financing for select wealth management clients. Additionally, Circle's USDC stablecoin is slated to become eligible collateral for futures trading through a collaboration between Coinbase Derivatives and Nodal Clear.

Key Takeaways

Fannie Mae and Freddie Mac are now mandated to consider cryptocurrency holdings in mortgage risk assessments.
This assessment will not require the conversion of crypto to U.S. dollars.
The decision reflects increasing mainstream acceptance of digital assets as collateral.
Only cryptocurrencies verifiable and stored on U.S.-regulated centralized exchanges will be considered.
This move could expand mortgage accessibility for individuals holding significant crypto assets.

Eligibility and Impact

FHFA Director William J. Pulte specified that only cryptocurrencies that can be

Sources:

Fannie Mae, Freddie Mac Ordered To Consider Crypto For Mortgages, Cointelegraph.