It’s no secret that buying a home is expensive. The average sales price for U.S. homes has hovered around $400,000 since the end of 2021, according to the Federal Reserve Bank of St. Louis.
Most homebuyers looking to cover that cost turn to mortgage lenders, who pore over financial details like salaries, bank balances and retirement accounts to determine how risky it is to lend the money.
That review process has typically excluded crypto assets. But for the roughly 15% of Americans who invest in digital assets, that could soon change.
In June, a directive issued by the Federal Housing Finance Agency ordered mortgage giants Fannie Mae and Freddie Mac to develop proposals to consider crypto as an asset in single-family home risk assessments.
The director of the agency, Bill Pulte, wrote in a post on X that he ordered the two enterprises to prepare their businesses to count cryptocurrency as an asset for a mortgage. Pulte said the directive came “after significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world.”
Daryl Fairweather, chief economist at Redfin, said the process would look similar to how lenders account for stocks and other investments.
“A lender would look at the assets that a potential borrower has, and before, they might have only considered stocks and bonds and those traditional kinds of investments, but now they would consider those less traditional cryptocurrency investments. And it might be a bit difficult for them to assess the riskiness, but I think they’re used to assessing the riskiness,” Fairweather said. “There are stocks that are even more volatile and risky than some long-standing cryptocurrencies so I think for the lender, it would be pretty easy for them to adapt their framework to incorporate crypto into that.”
The move from the FHFA found immediate backing from Sen. Cynthia Lummis, R-Wyo., who introduced a bill to codify the directive into law.
The directive from the federal lending agency also faced criticism from those who argue backing loans with crypto could add new stress to the home lending market.
In July, a group of Democratic senators sent a letter to Pulte, taking issue with his “risky proposals” to allow unconverted crypto assets in mortgage loan underwriting. The senators requested information regarding his directive to Fannie Mae and Freddie Mac, and they expressed concern that crypto is more volatile than traditional assets. They stressed that Congress and the public should better understand the agency’s decision-making process to assess the potential risks and benefits to the order and the implications for the housing market.
Watch the video above to learn why the Trump Administration wants to allow crypto-backed mortgages, and what it could mean for the housing market.
