US housing agency may allow crypto assets in mortgage qualification

The United States Federal Housing Finance Agency (FHFA) will study whether cryptocurrency holdings could be considered in mortgage qualification assessments.

In a Tuesday X post, US FHFA Director William Pulte — who was nominated by President Donald Trump — said the agency is examining cryptocurrencies. “We will study the usage [of] cryptocurrency holdings as it relates to qualifying for mortgages,” he said.

The FHFA sets the rules for US government-sponsored enterprises, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. If the agency allows borrowers to list Bitcoin (BTC), stablecoins or other tokens as eligible assets, it would integrate the asset class deeply into traditional finance.

Until Jan. 23, most major banks were unable to offer crypto-backed loans or mortgages. This limitation was due to the US Securities and Exchange Commission’s (SEC) accounting guidance SAB 121, which required listed companies to disclose crypto assets held on behalf of clients as liabilities on their balance sheets.

Source: PulteThis led to complications for banks, since capital requirements are linked to the balance sheet contents. On Jan. 23, the SEC officially rescinded this controversial guidance, opening the doors to new crypto financial integration.

Related: What are crypto-backed mortgages, and how do they work?

Crypto-backed mortgages

While crypto-backed mortgages already exist, they are specific products offered by specialized companies. Those firms typically allow customers to borrow fiat money to purchase real estate or for other purposes, in exchange for locking digital assets as collateral, usually with high collateralization requirements.

In such a setup, if the digital assets chosen as collateral fall in value, the customer often needs to add more assets to avoid liquidation in a margin call. With new guidance from the FHFA, we may soon see such offerings also from traditional banks, or even entirely new types of crypto-backed lending products.

Related: Real-world tokenization can drive homeownership — Quarter Homes CEO

Crypto as a way to buy real estate

According to a report released in late November 2024, a growing number of lower-income households are using gains from cryptocurrency investing to pay off their mortgages. Researchers wrote that “the increase in borrowing is especially striking among low-income households in high crypto exposure areas.”

Mauricio Di Bartolomeo, co-founder of Bitcoin-backed loan company Ledn, recently told Cointelegraph that some Bitcoin holders are using crypto-backed loans to purchase real estate without selling a single satoshi. He said those are generally high-net-worth individuals who do not meet the traditional criteria for real estate financing.

Magazine: Home loans using crypto as collateral: Do the risks outweigh the reward?

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