While the cryptocurrency community has spent years arguing that digital assets deserve recognition as legitimate stores of value, the Federal Housing Finance Agency has apparently decided to settle the debate with characteristic bureaucratic efficiency—by simply directing Fannie Mae and Freddie Mac to figure out how Bitcoin and Ethereum might fit into mortgage applications.
FHFA Director William Pulte’s directive, formalized through Decision No. 2025-360, represents the first official acknowledgment that crypto holdings might actually constitute real assets worthy of mortgage underwriting consideration. Previously, prospective homeowners had to liquidate their digital portfolios before loan closing—a process that triggered tax events and forced investors to crystalize gains or losses at potentially inopportune moments.
Crypto holders can finally avoid forced liquidation and unwanted tax events when applying for mortgages under the new FHFA framework.
This regulatory pivot addresses a fundamental liquidity paradox: borrowers with substantial cryptocurrency wealth often appeared asset-poor to traditional underwriters, despite potentially holding millions in digital value. The new framework allows lenders to evaluate borrowers’ complete financial profiles, including volatile assets that might appreciate (or evaporate) between application and closing.
The practical implications extend beyond individual mortgage approvals. Crypto holders can now strengthen their asset portfolios without maneuvering through complex liquidation strategies, while lenders must develop entirely new risk assessment methodologies. The challenge lies in valuing assets that can fluctuate 20% overnight—a volatility profile that makes traditional mortgage underwriting seem quaint by comparison.
Fannie Mae and Freddie Mac, those venerable gatekeepers of American homeownership, must now craft proposals addressing cryptocurrency verification, valuation, and risk assessment. This means developing technological infrastructure capable of authenticating blockchain holdings while establishing compliance frameworks for assets that exist primarily as cryptographic proofs. Additionally, cryptocurrency assets must be stored on U.S.-regulated centralized exchanges to meet the directive’s compliance requirements.
The broader economic context suggests this initiative aligns with administration policies favoring financial innovation and wealth diversification. Amid persistent housing affordability challenges, recognizing new asset classes potentially expands homeownership opportunities for digitally-native investors whose wealth exists primarily in cryptocurrency form. This approach aligns with President Trump’s broader economic vision of positioning the United States as the crypto capital of the world.
However, significant challenges remain. Price volatility complicates reliable asset valuation, while evolving regulatory frameworks create ongoing compliance uncertainties. The shift toward regulatory clarity represents a crucial step in addressing these uncertainties as the industry matures from speculation to tangible utility. Lenders must balance embracing innovation with managing risks inherent in assets that didn’t exist when traditional mortgage underwriting standards were established—a delicate calibration between progress and prudence.
