What Happened?
On June 26, Federal Housing Finance Agency (“FHFA”) Director William Pulte told Fannie Mae and Freddie Mac (the “government sponsored entities”) to draft policies that would consider a borrower’s cryptocurrency holdings as reserves or assets when qualifying for a mortgage, without requiring borrowers to convert those holdings into U.S. dollars, and cryptocurrencies under consideration would be those stored on a U.S.-regulated exchange.
Why It’s Important
Currently, cryptocurrency that has not been converted to U.S. currency cannot be considered when evaluating a borrower’s qualifications for a mortgage backed by the government sponsored entities. The Trump administration has expressed interest in bolstering and further legitimizing cryptocurrency in the U.S. financial system. Incorporating crypto assets into the housing industry would inextricably link crypto, a less established financial tool, to one of the most stable asset classes in America.
What To Do Next?
Fannie Mae and Freddie Mac are directed to develop proposals “as soon as reasonably practical.” Parties with an interest in housing finance should stay up to date with Fannie Mae and Freddie Mac announcements to see when proposals are published.
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