tl;dr
The US Federal Housing Finance Agency (FHFA) Director William J. Pulte ordered Fannie Mae and Freddie Mac to recognize cryptocurrency reserves as eligible assets in mortgage risk assessments for single-family loans, effective immediately. The enterprises must develop plans to include borrower crypto...
The US Federal Housing Finance Agency (FHFA) Director, William J. Pulte, has mandated that Fannie Mae and Freddie Mac recognize cryptocurrency reserves as eligible assets in their mortgage risk assessments for single-family loans. This directive takes effect immediately and requires the two government-sponsored enterprises to develop plans that incorporate borrower crypto holdings directly, without converting them into US dollars.
The directive imposes strict collateral rules, specifying that only cryptocurrency held in wallets controlled by US-regulated centralized exchanges can be recognized. Additionally, Fannie Mae and Freddie Mac must implement risk mitigants to address the inherent market volatility of digital assets and maintain reserve ratios that accurately reflect the proportion of crypto collateral. Each enterprise must also obtain board approval before submitting their proposals to the FHFA conservator for review.
By including cryptocurrency reserves in their risk models, Fannie Mae and Freddie Mac expand the range of asset information available for underwriting. This move aims to facilitate sustainable homeownership for credit-worthy borrowers by acknowledging the growing role of digital assets in personal finance. The directive calls for a risk-adjusted framework that values cryptocurrencies with appropriate haircuts and considers their interaction with other borrower assets and liabilities.
The FHFA’s order bypasses the usual lengthy process of rulemaking or legislative approval, illustrating the agency's authority to implement binding changes swiftly. Importantly, it does not alter conforming loan limits or documentation requirements but broadens the categories of qualifying reserves to include cryptocurrency holdings.
This policy aligns with a broader national strategy to bolster the United States as a leading hub for cryptocurrency innovation. The directive’s requirement to recognize only coins held on US-regulated exchanges ensures compliance with federal know-your-customer and anti-money laundering regulations. Though no public deadline has been set for submission of the required plans, the order remains in effect until amended or rescinded by the FHFA.