It's no secret that buying a home is expensive. According to the Federal Reserve Bank of St. Louis, the average sales price for U.S. homes is about $400,000 as of the end of 2021.
Most home buyers looking to cover these costs turn to mortgage lenders, who look at financial details such as salaries, bank balances and retirement accounts to determine how risky it is to borrow the money.
This verification process typically excluded crypto assets. But for the roughly 15% of Americans who invest in digital assets, that could soon change.
In June, a directive from the Federal Housing Finance Agency called on mortgage giants Fannie Mae and Freddie Mac to develop proposals to consider crypto as an asset when assessing the risk of single-family homes.
The agency's director, Bill Pulte, wrote in a post on X that he had instructed the two companies to prepare their businesses to count cryptocurrencies as an asset for a mortgage. Pulte said the policy came “after extensive review and in line with President Trump's vision of making the United States the crypto capital of the world.”
Daryl Fairweather, chief economist at Redfin, said the process would look similar to how lenders account for stocks and other investments.
“A lender would look at the assets that a potential borrower has, and before they might have only considered stocks and bonds and those traditional types of investments, but now they would be looking at these less traditional cryptocurrency investments. And it might be a little difficult for them to assess the risk, but I think they're used to assessing the risk,” Fairweather said. “There are stocks that are even more volatile and risky than some long-standing cryptocurrencies, so I think it would be fairly easy for the lender to adapt their framework to incorporate cryptocurrencies into it.”
FHFA's move received immediate support from Sen. Cynthia Lummis, R-Wyo., who introduced a bill to codify the policy into law.
The Federal Lending Agency's directive has also been criticized by those who argue that securing loans with cryptocurrencies could put new pressure on the home loan market.
In July, a group of Democratic senators sent a letter to Pulte challenging his “risky proposals” to allow unconverted crypto assets in mortgage loan underwriting. The senators demanded information about his instructions to Fannie Mae and Freddie Mac, raising concerns that cryptocurrencies are more volatile than traditional assets. They emphasized that Congress and the public should better understand the agency's decision-making process to assess the order's potential risks and benefits, as well as the impact on the housing market.
Watch the video above to learn why the Trump administration wants to allow crypto-backed mortgages and what it could mean for the real estate market.