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By Giulia Carbonaro
Senior Reporter
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The Federal Housing Finance Agency (FHFA) is calling on Fannie Mae and Freddie Mac to consider cryptocurrency as an asset on mortgage applications, in a move director William J. Pulte described as in line with the Trump administration's agenda.
"After significant studying, and in keeping with President Trump's vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage," Pulte wrote on X, sharing the directive issued by the agency on Wednesday.
Why It Matters
The policy announced by Pulte on Wednesday could be revolutionary for the U.S. housing market, reversing the course taken under the Biden administration by the two borrowing giants, when they issued guidance stating that a homebuyer's income paid in cryptocurrency could not be used on mortgage applications. The reason behind this decision, Fannie Mae and Freddie Mac stated, was "the high level of uncertainty associated with cryptocurrency."
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Cryptocurrencies remain highly volatile and the market suffers huge swings in prices, with Bitcoin suffering a 16 percent drop in February—the biggest weekly fall in two years. It is something that the FHFA is taken into consideration: under Pulte's directive, Fannie Mae and Freddie Mac should consider additional risk mitigants, including adjustment for market volatility, in their proposal.
What to Know
In the document shared by Pulte, the FHFA called on the two housing giants to prepare a proposal for considering cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion to U.S. dollars. Only crypto assets that can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws should be taken into consideration, it said.
The directive, however, did not specify which type of cryptocurrency Fannie Mae and Freddie Mac should consider.
Use of crypto for home buying has been limited so far. Only 1 percent of those who made a down payment said they used crypto, a National Association of Realtors (NAR) survey of people who bought a home between July 2023 and June 2024 found.
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The FHFA has the power to order Fannie Mae and Freddie Mac to consider crypto income on mortgage applications because of the conservatorship the two giants are still under, despite the Trump administration's intention to privatize them.
The two companies, which together guarantee more than half of all America's mortgages, have operated under the federal government's control since 2008, after suffering devastating losses during the subprime mortgage crisis.
During his first administration, Trump tried to privatize Fannie Mae and Freddie Mac, but unsuccessfully. Last month, the president said he was giving "very serious consideration" to taking the two companies public.
While Trump has remained set on his intention to privatize Fannie Mae and Freddie Mac through the years, his approach to cryptocurrencies has dramatically changed. While during his first administration he was skeptical of cryptocurrencies, Trump has since moved to embrace digital currencies, going as far as now having his own branded digital token.
It is unclear though if the administration's plan to allow homeowners to get a mortgage with their crypto assets would work. Any proposal made by Fannie Mae and Freddie Mac would need to be approved by the board of directors and the FHFA before taking effect, according to Pulte's directive.
What Happens Next
The FHFA order compels Fannie Mae and Freddie Mac to come up with a proposal "as soon as reasonably practical."
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