Bill Pulte, director of the Federal Housing Finance Agency, recently announced on X that he has ordered government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac “to prepare their businesses to count cryptocurrency as an asset for a mortgage.”
A draft order Pulte shared on the social media site states that “cryptocurrency is an emerging asset class that may offer an opportunity to build wealth outside of the stock and bond markets” and that “cryptocurrency has not typically been considered in the mortgage risk assessment process for mortgage loans delivered to the enterprises, without converting the cryptocurrency to U.S. dollars prior to loan closing.”
The order further states that the “FHFA has now determined that the consideration of additional borrower assets in the enterprises’ single-family mortgage loan risk assessments may enable the enterprises to assess the full spectrum of asset information available for reserves and to facilitate sustainable homeownership to creditworthy borrowers.”
The order direct the GSEs to “prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion of said cryptocurrency to U.S. dollars.”
“Each enterprise is directed to consider only cryptocurrency assets that can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws,” the order states. “Additionally, each enterprise is directed to consider additional risk mitigants per their own assessment, including adjustments for market volatility and ensuring sufficient risk-based adjustments to the share of reserves comprised of cryptocurrency. Prior to implementing any changes, each enterprise must submit and receive approval from its board of directors prior to submitting to U.S. Federal Housing FHA for review.”
So what are the risks to the GSEs and lenders if crypto is considered when underwriting mortgage loans? According to Roby Robertson, executive vice president of LoanLogics, which
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