FHFA Orders Fannie Mae Freddie Mac to Include Crypto in Mortgage Risk Assessments

The Federal Housing Finance Agency (FHFA) has issued a directive to Fannie Mae and Freddie Mac, instructing them to incorporate cryptocurrency holdings into their mortgage risk assessments. This move, signed by FHFA Director William J. Pulte on June 25, 2025, marks the first instance where digital assets will formally influence U.S. housing finance. The directive aims to evaluate the potential role of cryptocurrencies, such as Bitcoin and stablecoins, in determining mortgage qualifications, reflecting a significant shift in the agency's approach to digital assets.

The inclusion of cryptocurrencies in mortgage assessments could alter the traditional underwriting process, which currently relies on the "three C’s" — Credit, Capacity, and Collateral. By recognizing digital assets as a fourth 'C', the FHFA aims to acknowledge the growing importance of cryptocurrencies in personal finance. This recognition could benefit applicants with substantial digital assets, allowing them to utilize these assets in the mortgage process without the need for conversion to cash. The FHFA oversees key components of the U.S. housing market, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Currently, these entities require applicants to convert their crypto assets to U.S. dollars and hold them in a federally or state-regulated institution. The potential inclusion of crypto holdings in mortgage underwriting could streamline this process, making it more accessible for individuals with significant digital asset holdings.

According to the FHFA, crypto assets may now be accepted as reserve assets—but only if they are stored on U.S.-based, regulated exchanges and can be held without conversion into dollars. The decision is aimed at improving liquidity, flexibility, and access to mortgage financing, especially for younger or digitally native borrowers with significant crypto holdings. Fannie Mae and Freddie Mac are now required to develop internal risk assessment systems that account for the volatility and market fluctuations of crypto assets. Any implementation of these new practices must be approved by the institutions’ boards of directors and submitted to the FHFA for review.

This directive signals a broader institutional acceptance of crypto as part of household financial profiles and reflects the agency’s effort to modernize mortgage qualification standards in line with evolving asset trends. The announcement has sparked discussion within the digital asset community, with industry leaders sharing their perspectives on the potential implications. Michael Saylor, CEO of Strategy, proposed a Bitcoin credit model that considers factors such as loan duration, collateral coverage, Bitcoin price, volatility, and outlook for Bitcoin’s average annual return rate to generate statistical Bitcoin risk and credit spreads. This model aims to provide a framework for evaluating the use of Bitcoin in mortgage qualifications. Paul Grewal, Chief Legal Officer of Coinbase, also weighed in on the development, suggesting that the potential for crypto to be used as mortgage security is a significant step forward. His comment underscores the growing acceptance of digital assets in traditional financial systems.

The FHFA's study on the use of crypto holdings in mortgage qualifications represents a notable development in the integration of digital assets into mainstream finance. As the agency continues to explore this possibility, it could pave the way for a more inclusive and innovative approach to mortgage underwriting, benefiting both applicants and the broader housing market. The move aligns with the growing digital asset ownership among Americans and could potentially alter mortgage frameworks, making the housing market more accessible to individuals with significant cryptocurrency holdings. This engagement with cryptocurrencies may result in new analytical frameworks, altering long-standing financial eligibility criteria and potentially inspiring updated financial regulations.