The U.S. housing finance system is pushing forward with a new arrangement: when applying for a mortgage, borrowers' holdings of crypto assets such as Bitcoin may be included in reserve assets for loan risk assessment without first converting them into US dollars. This means that some cryptocurrency holders will not have to sell their assets to meet loan approval requirements when applying for a mortgage.
This change stems from instructions from the Federal Housing Finance Agency to Fannie Mae and Freddie Mac. The two agencies are required to submit proposals regarding the use of cryptocurrency as a reserve asset in single-family mortgage risk assessments. Because Fannie Mae and Freddie Mac provide liquidity support for most traditional mortgages in the United States, their adjustments to the criteria often impact underwriting standards across the entire mortgage market.
First recorded as reserve assets
The currently disclosed direction is not to allow borrowers to directly "buy a house with Bitcoin." A more practical use is to use verified crypto assets as a financial buffer, or reserve assets, during loan approval. Lenders typically use this to determine whether a borrower will still be able to repay their mortgage in the event of an income interruption.
This also means that the cash required for the actual transaction, such as down payments and transfer fees, will still typically need to be provided in US dollars in the short term. Even if crypto assets are recognized, they will primarily enhance the borrower's asset position, rather than replace the cash needed for the transaction.
The old rules required selling coins first.
Under the previous rules, if borrowers wanted their crypto assets to be approved for mortgage approval, they usually had to sell them and convert them into US dollars, then deposit the funds into a bank account. Only after the source and retention time were verified could the relevant amount be credited.
This process incurs several practical costs, including triggering capital gains tax, losing exposure to subsequent price increases, and being forced to sell at the prevailing market price at the time of application. The core change in the new framework is that "there is no need to convert to US dollars first," allowing crypto assets to be directly included in the audit process as verified reserve assets.
The scope of application is still limited.
Even if the policy is implemented, there will still be barriers to acceptance for crypto assets. The report mentions that initially, only assets held on regulated centralized exchanges in the United States are more likely to be accepted; private wallets or other custody methods may not be applicable.
At the same time, Fannie Mae and Freddie Mac are expected to apply risk discounts to these assets. This is because crypto asset prices are highly volatile, and the reserve capacity may not be calculated based on the full market value during the review process, but rather on the discounted amount.
Furthermore, the plan may limit the proportion of crypto assets in total reserves. In other words, borrowers cannot rely entirely on Bitcoin or Ethereum to meet all reserve requirements; traditional cash or other financial assets may still be a necessary component.
Overall, this adjustment resembles the first time the US housing finance system has formally incorporated crypto assets into the traditional mortgage review framework, rather than immediately opening up "direct home purchases with cryptocurrencies." If subsequent implementation details are clarified, crypto holders with substantial assets held in escrow by regulatory platforms but with a low proportion of cash holdings may be the first to benefit.
