FHFA Allows Crypto as Mortgage Collateral Bitcoin Surges 7.3%

On June 25th, the US Federal Housing Finance Agency (FHFA) made a historic move by directing Fannie Mae and Freddie Mac to include cryptocurrency assets in mortgage risk assessments for loans. This policy shift allows borrowers to use digital assets directly as collateral for home loans, eliminating the need to convert them into US dollars beforehand. This groundbreaking decision marks the first time cryptocurrency has been accepted by America’s housing finance system, signaling a significant step in the Trump administration’s strategy to build a crypto economic center.

Eligibility for this new policy is limited to crypto assets stored on US-regulated centralized exchanges. Borrowers must provide clear value proof and comprehensive compliance verification. Fannie Mae and Freddie Mac are required to submit detailed proposals within 90 days, followed by board and FHFA approval before final implementation. This policy is expected to benefit young homebuyers, technology workers, and crypto asset holders who have struggled with traditional loan applications due to insufficient conventional assets.

Following the announcement, Bitcoin prices surged by 7.3% to $108,000, reaching month-high levels. Ethereum and Solana experienced slight declines as capital flowed toward Bitcoin. Michael Saylor, founder of MicroStrategy, described this development as a significant milestone for Bitcoin becoming a legitimate reserve asset. Traditional financial institutions like JPMorgan Chase have accelerated their crypto collateral loan product development, planning to include Bitcoin ETFs in wealth management clients’ financing collateral options.

In 2024, the Federal Housing Administration (FHA) issued 760,000 individual housing loans worth $230 billion in total value. If the new policies are successfully implemented, the number of qualified homebuyers could expand significantly, potentially reaching hundreds of billions of dollars in incremental markets.

To ensure compliance, only centralized exchange-custody crypto assets will be accepted, ensuring complete traceability and anti-money laundering (AML) compliance standards. Fannie Mae and Freddie Mac must establish sophisticated dynamic risk assessment models to monitor collateral value fluctuations in real-time and set appropriate risk-weighted reserve requirements. Institutions like Blockware propose utilizing Bitcoin blockchain transparency to verify asset holdings accurately, reducing audit costs. Coinbase has launched wrapped tokens, providing standardized solutions for comprehensive on-chain asset verification.

However, the integration of cryptocurrency into mortgage lending presents significant challenges. Traditional mortgage lending relies on income and asset stability, while crypto asset prices can fluctuate over 50% within a few days. This volatility makes stress testing models extremely complex. Historical examples, such as Tesla’s losses due to Bitcoin market crashes and Milo Credit’s customer default waves, highlight the risks involved. Additionally, the Trump administration’s repeal of SEC Staff Accounting Bulletin No. 121 allows financial institutions to list crypto assets on balance sheets, but FHA programs still prohibit crypto collateral usage, potentially triggering market arbitrage behaviors.

In the short term, approximately 65 million US crypto holders may obtain loan qualifications through comprehensive asset verification processes. Compliant platforms like Coinbase and Kraken will accelerate custody market share competition strategies. Long-term trends may include the tokenization of private company stocks and real estate properties, as well as global emulation by economic regions like the European Union and Singapore.

The mortgage industry must develop sophisticated valuation models for highly volatile digital assets and overhaul traditional risk assessment frameworks. Banks need robust technological infrastructure to integrate crypto asset verification into existing loan processing systems, representing significant operational investments and workforce training requirements. Real estate markets may experience increased activity as crypto holders gain homebuying access, particularly in tech-heavy regions. Traditional mortgage brokers must adapt to new asset categories and evolving compliance requirements, with educational programs becoming essential for industry professionals.

State-level housing authorities may develop varying approaches to crypto collateral acceptance policies, creating significant regional market differences and opportunities. Consumer protection agencies will likely increase scrutiny of crypto-backed mortgages, with new disclosure requirements emerging to protect borrowers from volatility risks. This policy shift represents a fundamental reconstruction of global asset pricing logic and financial system foundations, with the success or failure of this experiment determining the foundational rules of next-generation financial systems. The integration of digital assets into traditional lending marks a truly pivotal moment in financial evolution history.