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On June 25, the Federal Housing Finance Agency (FHFA) issued a directive ordering Fannie Mae and Freddie Mac to prepare proposals for treating cryptocurrency held on U.S.-regulated exchanges as assets for reserves in single-family mortgage loan risk assessments without requiring conversion to U.S. dollars.
Director William J. Pulte of the FHFA, which oversees Fannie Mae and Freddie Mac (the "GSEs"), emphasized that the move may enhance access to sustainable homeownership by recognizing a broader spectrum of borrower assets. The directive marks the first formal step toward integrating digital assets into GSE's underwriting frameworks.
As outlined in the order, each GSE must address the following requirements in its proposal:
- Crypto reserves may be included without conversion into U.S. dollars. The Enterprises must evaluate how verified crypto holdings could factor into borrower reserves, even if not converted to U.S. dollars.
- Only regulated exchange holdings qualify. Eligible crypto assets must be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws.
- Risk-based adjustments are required. The GSEs must consider additional risk mitigation to account for market volatility and limit the portion of reserves composed of cryptocurrency.
Putting It Into Practice: By directing Fannie Mae and Freddie Mac—who guarantee over half of U.S. mortgages—to consider verified crypto reserves in underwriting, FHFA could expand mortgage access for crypto-holding borrowers. This FHFA directive is the latest in a series of initiatives by federal and state regulators advancing a crypto-based agenda in financial services (previously discussed here, here, and here).
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