The U.S. government-sponsored mortgage system is integrating cryptocurrency into underwriting for the first time. Federal Housing Finance Agency Director William J. Pulte signed Decision No. 2025-360 on June 25, directing Fannie Mae and Freddie Mac to prepare proposals recognizing verified crypto...
"For every dollar of preferred equity, issuers hold $3.80 to $4.50 in bitcoin — but a 50% drawdown erases that buffer in weeks." — Douglas Holtz-Eakin, President, American Action Forum
The U.S. government-sponsored mortgage system is integrating cryptocurrency into underwriting for the first time. Federal Housing Finance Agency Director William J. Pulte signed Decision No. 2025-360 on June 25, directing Fannie Mae and Freddie Mac to prepare proposals recognizing verified cryptocurrency holdings as legitimate assets in single-family mortgage risk assessments — without requiring conversion to U.S. dollars. The directive applies to assets stored on U.S.-regulated centralized exchanges.
The first live product launched in March 2026. Better Home & Finance and Coinbase funded the first Fannie Mae-backed, crypto-collateralized conforming mortgage, allowing borrowers to pledge Bitcoin or USDC instead of liquidating holdings for a cash down payment. The product is structured as two loans: a standard conforming mortgage sold to Fannie Mae, and a separate interest-only down payment loan secured by the borrower's crypto and a second lien on the property. Rates run 0.5 to 1.5 percentage points above standard 30-year loans, depending on borrower profile.
The stakes are substantial. Fannie Mae and Freddie Mac back more than $7 trillion in mortgages — approximately 70% of the U.S. market. Between 50 and 70 million Americans hold cryptocurrency directly or through ETFs, according to Scotsman Guide. An estimated 12.7% of young homebuyers already used crypto to help fund down payments as of May 2025, per Newsweek. The question is whether integrating a historically volatile asset class into the taxpayer-backed housing finance system creates net economic value — or embeds systemic fragility.
FHFA Director Pulte's Decision No. 2025-360, issued June 25, orders both GSEs to prepare proposals that would allow mortgage lenders to account for unconverted cryptocurrency assets in the underwriting process. The directive specifies several guardrails:
Under current GSE guidelines, borrowers must convert cryptocurrency to U.S. dollars before it counts toward reserves. The directive would eliminate that conversion requirement, allowing crypto to sit alongside stocks, bonds, and cash in asset verification. However, borrowers would not be permitted to repay mortgages in cryptocurrency — the recognition applies to capacity and risk assessments, not payment rails.
As of early July 2026, no final FHFA-approved guidelines exist for broad implementation across both GSEs, according to industry sources cited by Scotsman Guide. The directive remains an internal order awaiting GSE proposals.
Before the FHFA directive matured into formal guidelines, the first live product reached the market. On March 26, 2026, Better Home & Finance and Coinbase announced a Fannie Mae-compliant mortgage allowing crypto collateral for down payments.
Product mechanics:
The structure allows borrowers to avoid capital gains taxes triggered by crypto liquidation while maintaining exposure to price appreciation. Coinbase provides custody infrastructure and earns collateral management fees. The mortgages carry no margin calls — if Bitcoin drops in value, loan terms remain unchanged and no additional collateral is required.
According to Coinbase's blog, the product launched with Bitcoin and USDC as eligible collateral, with a nationwide rollout planned for summer 2026. Broadridge provides proxy voting infrastructure for any tokenized securities used in the ecosystem.
The non-qualified mortgage (non-QM) sector adopted crypto underwriting ahead of the GSEs. Three lenders launched products in late 2025 and early 2026:
Newrez (owned by Rithm Capital, approximately $53 billion AUM) announced its crypto mortgage program in late 2025. Newrez limits approved assets to Bitcoin, Ethereum, SEC-approved spot ETFs backed by BTC or ETH, and USD-backed stablecoins. All holdings must be verified through U.S.-regulated exchanges or federally regulated brokerages. Newrez claims to be the first among the nation's top 25 lenders to allow digital assets in loan qualification without requiring liquidation.
Milo, a specialist crypto mortgage lender, crossed $100 million in total originations by February 2026, including a single $12 million crypto-backed mortgage — its largest to date. Milo's model differs: borrowers pledge 100% of the property's value in crypto collateral, held with custodians like Coinbase or BitGo, or through self-custody. The crypto secures the loan directly rather than substituting for a traditional down payment.
Newfi, a non-QM lender, announced crypto-backed products in February 2026, initially allowing crypto as reserves for DSCR (debt service coverage ratio) rental investor loans. Newfi applies valuation haircuts to crypto holdings to account for volatility.
Senator Cynthia Lummis (R-WY) introduced the 21st Century Mortgage Act to codify Pulte's directive into statute. The bill would:
According to Senator Lummis's office, the bill targets a generational wealth gap: U.S. Census Bureau data shows just 36.6% of adults under 35 own homes, the lowest rate since tracking began in 1982. The median age of first-time homebuyers climbed from 30 in 1990 to 40 in 2025. The argument is that excluding crypto from reserve calculations disadvantages a generation that holds significant digital asset wealth.
The bill had not advanced to committee vote as of early July 2026.
The central challenge is Bitcoin's historical volatility profile applied to mortgage timelines. According to Consumer Federation of America analysis:
For mortgage underwriting, this volatility profile creates asymmetric risk. If crypto is counted as reserves at $100,000 per Bitcoin and drops 50% within months, the borrower's effective reserve position halves — but the mortgage obligation remains fixed. The Better-Coinbase product addresses this partially by eliminating margin calls, but this shifts risk to the lender (and, through the Fannie Mae guarantee, to taxpayers).
A 2024 Federal Reserve study cited by Scotsman Guide noted that crypto volatility exceeds traditional assets during crypto-specific stress periods. Bitcoin-backed preferred stock instruments maintain coverage ratios of 3.8x to 4.5x — meaning $3.80 to $4.50 in Bitcoin for every $1 of preferred equity — but a 50% drawdown compresses that buffer to approximately 1.9x to 2.25x.
Seven Democratic senators have raised formal objections. Senators Elizabeth Warren, Bernie Sanders, Jeff Merkley, Chris Van Hollen, Mazie Hirono, and Dick Durbin wrote to Pulte citing three primary concerns:
The Consumer Federation of America published a detailed critique in 2026 arguing the dual-loan structure creates complexity that disadvantages borrowers. With two loans carrying different terms, payment schedules, and default rules, consumer protection applicability is unclear. The organization also flagged stablecoin depegging risk: if USDC or similar stablecoins fall below their promised targets during market stress, collateral values erode even for borrowers who chose the "safer" crypto option.
According to Pew Research data cited by CFA, 63% of Americans believe cryptocurrency is unsafe.
The policy targets a measurable population. According to Security.org's 2026 Cryptocurrency Adoption Report:
The homeownership rate for adults under 35 stands at 36.6%, per Census Bureau data — the lowest since tracking began. Baby boomers account for 42% of home purchases versus 26% for millennials and 4% for Gen Z. The median first-time buyer age reaching 40 in 2025 reflects systematic exclusion of younger cohorts from housing markets.
The crypto-mortgage thesis is that recognizing digital assets as reserves unlocks purchasing power for a demographic cohort that holds crypto disproportionately but is underrepresented in homeownership. Whether this represents genuine wealth inclusion or risk-layering onto a government-backed system depends on volatility management and regulatory guardrails that remain unfinished.
| Factor | Traditional Assets (Stocks/Bonds) | Cryptocurrency | |--------|----------------------------------|----------------| | Max historical drawdown | S&P 500: ~57% (2008-09) | BTC: ~94% (2011), ~77% (2022) | | Custody | SIPC-insured brokerages | CEX custody, not SIPC-insured | | Liquidity | T+1 settlement | Near-instant, 24/7 | | Valuation | Standardized pricing feeds | Exchange-dependent, fragmented | | Regulatory clarity | SEC-regulated securities | Evolving; no uniform framework | | Tax treatment on liquidation | Capital gains | Capital gains | | Fraud/theft risk | Broker insurance, clawback rights | Exchange hacks, limited recourse |
The 24/7 liquidity of crypto is a structural advantage over traditional securities for collateral monitoring. However, the absence of SIPC insurance and the history of exchange failures (FTX, 2022) create counterparty risks not present in traditional reserve assets.
The integration of cryptocurrency into GSE mortgage underwriting represents a direct test of whether digital assets can function as conventional financial reserves within government-backed systems. The policy architecture — from Pulte's directive to the Lummis bill to the Better-Coinbase product — is moving faster than the risk management frameworks required to support it.
The economic question is precise: does a 49% drawdown in four months constitute acceptable reserve behavior for an asset class backing 30-year obligations guaranteed by taxpayers? The non-QM market's approach — haircuts, exchange-only custody, liquid-asset-only eligibility — offers one model. The GSE system, with its implicit government guarantee and $7 trillion portfolio, demands a more conservative one. As of July 2026, no final FHFA guidelines define what that conservatism looks like.
The policy will be tested by the next crypto drawdown. The question is whether guardrails exist before it arrives.