The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac — guarantors of more than half of all U.S. mortgages — to incorporate cryptocurrency holdings into single-family mortgage risk assessments. The directive, issued by FHFA Director William Pulte in June 2025, produced...
"We have now finally created the infrastructure rails to enable any tokenized asset in America to be able to be pledged to help someone afford to buy a home." — Vishal Garg, CEO, Better Home & Finance
The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac — guarantors of more than half of all U.S. mortgages — to incorporate cryptocurrency holdings into single-family mortgage risk assessments. The directive, issued by FHFA Director William Pulte in June 2025, produced its first conforming mortgage product in March 2026: a dual-loan structure developed by Better Home & Finance and Coinbase that allows borrowers to pledge Bitcoin or USDC as down payment collateral on Fannie Mae-backed loans.
Since then, at least three major lenders — Better, Newrez, and Rate — have launched crypto-inclusive underwriting programs. Senate Democrats led by Dick Durbin, Elizabeth Warren, and Jeff Merkley have responded with formal letters demanding risk analyses, setting a May 30, 2026 response deadline for the FHFA. With approximately 70 million Americans — roughly 30% of U.S. adults — holding cryptocurrency, the policy change sits at the intersection of a $8.5 trillion mortgage market and a $3 trillion digital asset ecosystem. No standardized underwriting methodology exists. Volatility haircuts range from 20% to 60% depending on the lender.
On June 25, 2025, FHFA Director William Pulte posted a public directive ordering Fannie Mae and Freddie Mac to "prepare their businesses to count cryptocurrency as an asset for a mortgage." The order specified that the government-sponsored enterprises (GSEs) should consider only cryptocurrency assets stored on U.S.-regulated centralized exchanges subject to applicable laws.
The directive instructed the enterprises to develop proposals addressing:
Prior to this directive, Fannie Mae and Freddie Mac required borrowers to convert all cryptocurrency holdings to U.S. dollars before those funds could be considered in the mortgage application process. The conversion requirement created taxable events — specifically, capital gains realizations — that deterred crypto holders from using digital assets toward home purchases.
According to Pulte, the move aligns with "President Trump's vision to make the United States the crypto capital of the world." Pulte added: "I want people who own cryptocurrency to be able to buy homes like everyone else. I believe cryptocurrency is an asset."
On March 26, 2026, Better Home & Finance and Coinbase launched the first Fannie Mae-compliant crypto-collateralized mortgage product. The structure operates as follows:
Loan 1 — Conforming Mortgage: A standard Fannie Mae-backed first-lien mortgage on the property, underwritten to conforming loan standards. Available as 15-year or 30-year fixed-rate terms.
Loan 2 — Crypto-Collateralized Down Payment: A second-lien loan secured by Bitcoin or USDC pledged by the borrower, which funds the cash down payment on the first loan. The crypto assets are held in custody by Better on the Coinbase platform.
Both loans share the same interest rate and amortization term, producing a single combined monthly payment. According to a Coinbase spokesperson, rates on the crypto-backed product run 50 to 150 basis points higher than a standard 30-year conforming mortgage, depending on the borrower profile.
A notable feature: there is no margin-call mechanism. If Bitcoin's price declines after closing, the borrower is not required to post additional collateral. Better absorbs this risk through the second-lien structure.
Coinbase One members who are approved receive a rebate of 1% of the mortgage value, capped at $10,000.
As of the latest available data, approximately 500 prospective borrowers have joined a waitlist for the product since the March launch.
The FHFA directive has triggered a cascade of lender adoption, though activity remains concentrated among a small number of firms:
Newrez — The fourth-largest U.S. mortgage lender by volume ($44.5 billion originated from January through September 2025) — announced in February 2026 that it would begin recognizing Bitcoin, Ethereum, SEC-approved spot crypto ETFs, and USD-backed stablecoins across its Smart Series suite of non-agency products. Newrez does not require borrowers to liquidate crypto holdings; instead, digital assets are used for asset verification and income estimation.
Rate — Launched its RateFi program, which enables qualified borrowers to use verified cryptocurrency as part of income and asset qualification for mortgage applications.
Better Home & Finance — The only lender currently offering a Fannie Mae-conforming crypto-collateralized product, via the Coinbase partnership described above.
In each case, eligible crypto must be held on a U.S.-regulated exchange (such as Coinbase), an SEC- or FINRA-regulated brokerage, or a nationally chartered bank under OCC oversight. Self-custody wallets and assets held in DeFi protocols are excluded.
The absence of standardized underwriting rules is the defining feature of the current landscape. According to HousingWire, there is no standardized token eligibility list, no agreed methodology for volatility adjustments, and no broadly adopted documentation standard for wallet verification. Each lender operates on internally developed policies.
Volatility haircuts — the discount applied to crypto market values when assessing borrower reserves — vary substantially:
| Lender / Framework | Haircut Applied | Effective Value of $100K in BTC | |---|---|---| | UMortgage | 50% | $50,000 | | Fannie Mae framework (estimated) | 40–50% | $40,000–$50,000 | | Industry range | 20–60% | $40,000–$80,000 |
Some lenders cap the proportion of total reserves that can consist of crypto. Estimates from industry sources suggest limits of 20% to 30% of total reserves, though no formal standard exists.
The valuation problem is compounded by crypto's 24/7 trading cycle. Traditional mortgage underwriting uses a point-in-time appraisal of assets. Bitcoin's price can move 5–10% in a single day. Lenders have adopted varying approaches: some use a trailing 30-day average, others use the lower of the spot price at application and at closing.
Two rounds of formal congressional opposition have targeted the FHFA directive:
July 2025: Senators Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Mazie Hirono (D-HI), and Bernie Sanders (I-VT) sent a letter to Pulte raising concerns that unconverted cryptocurrency in underwriting "could introduce unnecessary risks to consumers." The senators argued that "a borrower using crypto faces an increased risk that they may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default."
April 30, 2026: A second, broader letter was sent by Senate Democratic Whip Dick Durbin (D-IL), Warren, and Merkley, joined by Van Hollen, Richard Blumenthal (D-CT), Sanders, and Hirono. This letter specifically targeted the Better-Coinbase product, stating that "crypto-backed mortgages, launched without any pilot, opportunity for public input, or public research into default risk, flaunt this duty." The senators requested responses by May 30, 2026.
The FHFA has not publicly responded to either letter as of publication.
Several structural risks merit attention:
Correlation risk: Bitcoin has exhibited periods of high correlation with equities. In a recession scenario where housing prices decline and crypto assets fall simultaneously, borrowers could face negative equity on both the property and the collateral backing the second lien. The 2022 crypto winter, in which Bitcoin fell 65% from its November 2021 peak, illustrates this scenario.
Taxpayer exposure: Fannie Mae and Freddie Mac remain in government conservatorship. Losses on crypto-backed mortgage products would ultimately flow through to the federal government. The 2008 financial crisis resulted in a $190 billion Treasury bailout of the GSEs. The introduction of a new, volatile asset class into the GSE underwriting framework raises questions about incremental taxpayer exposure.
Liquidity assumptions: The current framework requires crypto to be held on regulated centralized exchanges. This assumes continued exchange solvency and operational functionality. The FTX collapse in November 2022, which rendered $8 billion in customer funds inaccessible, demonstrated the fragility of this assumption.
Lack of standardization: With each lender developing independent underwriting criteria, the market risks producing inconsistent borrower outcomes and creating regulatory arbitrage opportunities. A borrower rejected by one lender at a 50% haircut could be approved by another at 20%.
Scale limitations: At present, the market is small. Approximately 500 borrowers are on the Better-Coinbase waitlist. Newrez has not disclosed crypto-specific origination volumes. The systemic risk is currently minimal but would scale with adoption.
The integration of cryptocurrency into U.S. mortgage underwriting represents a structural shift in how the housing finance system recognizes digital wealth. The FHFA directive, the Better-Coinbase product, and the lender adoption that has followed mark the first time crypto assets have entered the conforming mortgage pipeline without requiring liquidation.
The economic logic is straightforward: 70 million Americans hold crypto, and denying them the ability to use those assets for home purchases creates friction in the housing market. The policy response — acceptance with volatility discounts — is a pragmatic middle ground.
The outstanding question is one of standardization and risk management. The current patchwork of lender-specific haircuts, eligibility lists, and documentation requirements is unsustainable at scale. Either the FHFA, Fannie Mae, or an industry body will need to establish uniform standards. Until that happens, the market will function but with the inefficiencies and inconsistencies typical of early-stage financial product development.
The congressional challenge adds a political dimension. Whether the FHFA responds substantively to the May 30 deadline, or whether the inquiry produces legislative action, will shape the regulatory trajectory for the remainder of 2026.