The U.S. Federal Housing Finance Agency (FHFA) is considering including cryptocurrencies, such as Bitcoin, in mortgage approval processes. This move comes amid a growing housing crisis in the U.S., where there is a severe shortage of over 4.5 million homes.
FHFA Director William Pulte said on Tuesday that the agency will examine how digital assets like Bitcoin and stablecoins could factor into mortgage qualifications. No timeline or further details were given. Pulte took office as FHFA director on March 14, following a Trump nomination, bringing both real estate lineage and crypto enthusiasm to the role.
The FHFA regulates America's housing finance system and oversees major institutions like Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Traditionally, mortgage underwriters accepted collateral that included the applicant's savings, retirement accounts, and publicly traded securities. Cryptocurrencies, however, have long been excluded due to market volatility and a lack of regulatory clarity.
This development could substantially change the underwriters' reluctance, as the emerging industry could be recognized as a viable financial instrument for house financing. Notably, the planned review comes amid a broader wave of regulatory openness toward crypto in the US, especially under President Donald Trump's administration.
FHFA's exploration of crypto in mortgage processes reflects a wider regulatory shift towards embracing digital financial assets. While FHFA has yet to reveal how the crypto mortgage processes would be evaluated, Michael Saylor's firm, Strategy, has developed a Bitcoin credit framework that assesses risk using BTC's price, volatility, loan term, and projected returns.
If Bitcoin USD holders can list their crypto assets during the mortgage underwriting process, this policy shift could ease access to credit for digitally native investors. FHFA Director William J. Pulte has confirmed that the agency is now reviewing how to incorporate crypto into the asset evaluation framework.
Mortgage underwriters traditionally evaluate borrowers on three basic categories: credit, capacity, and collaterals. Some of the assets used to determine the financial position of the borrower include reserves in cash or equity, as well as retirement funds. So far, digital assets have not been included since they are volatile and few regulators provide regulations to guide them.
The FHFA's ongoing review could introduce Bitcoin USD as a “fourth C,” altering the mortgage qualification landscape in the U.S. Analysts are monitoring the development amid growing institutional interest in digital assets.
The FHFA's consideration of how crypto holdings could affect mortgage applications signals a potentially groundbreaking shift in U.S. housing finance. If crypto holdings, especially BTC or stablecoins, are officially recognized as qualifying assets, it could open the door for millions of Americans who've built wealth digitally but remain locked out of traditional lending.
Currently, even if a borrower has a strong crypto portfolio, lenders often require those assets to be converted into fiat and “seasoned” in a bank account for months before they can be counted. This policy may be due for a reset. By treating crypto like other liquid assets, the FHFA could help bring mortgage standards in line with a changing financial reality and expand access to credit for digitally native borrowers.