The wind of encryption assets has blown into the US real estate industry.

Deng Tong, Golden Finance

On Wednesday local time, the Director of the Federal Housing Finance Agency (FHFA), Pulte, posted on social media: "After in-depth research and following President Trump's vision of making the United States the 'capital of cryptocurrency', I have today ordered Fannie Mae and Freddie Mac to prepare to recognize cryptocurrency as an eligible asset for mortgage applications." This directive marks a significant shift in the U.S. government's support for companies in the asset review standards for assessing mortgage eligibility, and it is also in line with the established goal of the Trump administration to promote the popularity of cryptocurrency in the United States.

Finally, the wind of cryptocurrency assets has reached the U.S. real estate industry.

1. Why should cryptocurrencies be classified as recognized assets for collateral loan applications?

The core reason is the sluggishness of the U.S. real estate market. For the past 50 years, the homeownership rate in the U.S. has remained relatively stable, with about 62% of the population owning homes. However, in recent years, the number of new housing applications has sharply declined. Since mortgage rates have climbed from pandemic lows in early 2022, the U.S. housing market has continued to be sluggish. Last year, home sales fell to a nearly 30-year low, marking the second consecutive year of depressed sales. So far this year, high interest rates and housing prices continue to suppress any signs of recovery. According to Redfin, as of April, the number of sellers in the national housing market was nearly 34% higher than that of buyers.

Additionally, the number of mortgages issued (i.e., the process of collaboration between lenders and borrowers to form mortgages) fell to near historical lows in mid-2024, with little improvement in the first quarter of 2025. The decline in issuance, particularly in refinancing, is attributed to two main factors: housing supply issues and borrowing costs.

Forecast of mortgage issuance from 2012 to the third quarter of 2026. Source: Statista

First, the growth of housing supply is insufficient to meet demand. Housing construction is lagging behind, more homes are being purchased by investors rather than potential buyers, and older homeowners continue to choose to live in their homes rather than move to nursing homes.

The cost of borrowing is also increasing, and many attribute the decline in loan issuance to the Federal Reserve raising interest rates to curb inflation. However, the stringent scrutiny by banks on loans due to the aftereffects of the subprime mortgage crisis cannot be ignored. For example: down payments cannot be less than 20%, credit scores must be above 700, and proof of a stable source of income is required, among other things. Many real estate transactions are canceled because buyers cannot secure loans.

In the face of these adverse factors, the U.S. government is looking for ways to make it easier for homeowners to borrow money, ultimately placing its hopes on cryptocurrency.

2. Federal Housing Finance Agency (FHFA) Instruction Content Overview

The Director of the Federal Housing Finance Agency (FHFA), Pulte, signed an order on Wednesday local time that classifies cryptocurrency as an eligible asset for mortgage applications, marking the first time cryptocurrency has been included in the core system of housing loans in the United States. Below is the original text of the order:

Federal Housing Finance Agency (FHFA)

About: Issuing instructions to regard cryptocurrencies as an asset in risk assessment (Fannie Mae and Freddie Mac)

Decision Number: 2025-360

Issue a directive, treat cryptocurrencies as an asset for single-family residential loans provided to Fannie Mae and Freddie Mac

In view of the fact that Fannie Mae and Freddie Mac (collectively referred to as the "enterprises") provide stability and liquidity to the residential mortgage secondary market through prudent standards, ensuring sustainable long-term homeownership, they play a critical role in the U.S. housing finance system.

Given that cryptocurrencies are an emerging asset class, they may offer opportunities to accumulate wealth outside of the stock and bond markets.

Given that cryptocurrencies are typically not considered in the mortgage risk assessment process for loans provided to "enterprises" if they have not been converted into US dollars prior to loan settlement.

In light of the fact that the Federal Housing Finance Agency (FHFA) has determined that considering additional borrower assets in the enterprise-level single-family residential mortgage risk assessment may enable enterprise-level institutions to evaluate the full asset information available for reserves and facilitate sustainable homeownership for creditworthy borrowers. Therefore, the Federal Housing Finance Agency, as the custodian, hereby directs each enterprise-level institution to prepare a proposal to consider cryptocurrency as a reserve asset in their respective single-family residential mortgage risk assessments without the need to convert cryptocurrency into US dollars. Each enterprise-level institution should only consider cryptocurrency assets that can be verified and stored on U.S. regulated centralized exchanges and comply with all applicable laws. Additionally, each enterprise-level institution should also consider additional risk mitigation measures based on its own assessments, including adjustments based on market volatility and ensuring that the proportion of cryptocurrency in reserves is adequately risk-adjusted. Before implementing any changes, enterprises must submit and obtain approval from their boards and then submit to the Federal Housing Finance Agency (FHFA) for review.

This command takes effect immediately and should be implemented as soon as reasonably practicable.

William J. Pálte Director of the Federal Housing Finance Agency

3. What is the significance of listing cryptocurrencies as recognized assets for collateral loan applications?

1. Improve the current situation of the real estate market

As mentioned earlier, the U.S. real estate market is sluggish, and this policy may stimulate demand in the real estate market. More holders of crypto assets entering the ranks of homebuyers can increase market demand, alleviate the downturn in the real estate market, and play a positive role in stabilizing and promoting the development of the real estate market.

2. Favorable for cryptocurrency lending institutions

The Federal Housing Finance Agency ( FHFA ) officially recognizes cryptocurrency, which may open up substantial federal loan programs for more borrowers. In 2024, the Federal Housing Administration alone issued over 760,000 single-family home mortgages, totaling $230 billion.

According to the Bank Rules set forth by the U.S. Securities and Exchange Commission (SEC) in the Staff Accounting Bulletin No. 121, most banks will not be able to offer cryptocurrency-backed loans or mortgages before January 23, 2025. The rule requires financial institutions to classify cryptocurrencies as liabilities rather than assets on their balance sheets.

However, loans obtained through federal programs such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA) currently do not allow borrowers to use their cryptocurrency as collateral. In fact, some federal loans may even prohibit the use of dollars derived from the sale of cryptocurrency for down payments.

The founder of the Bitcoin mortgage and bond company "People's Reserve," CJ Konstantinos, stated that Bitcoin can further help reduce the risks in the mortgage-backed securities market regulated by the Federal Housing Finance Agency (FHFA) through the regulation of Fannie Mae and Freddie Mac.

3. Promote the integration of cryptocurrency assets with the traditional financial system.

The FHFA's directive is a significant breakthrough for cryptocurrencies in the traditional financial sector, signifying that digital assets are being incorporated into the core system of housing credit in the United States. Cryptocurrencies play an equally important role as fiat currency in people's lives. This will also promote the public's understanding of crypto assets and accelerate their adoption in daily life.

4. What do industry insiders think?

Bitcoin supporters praised Pulte's open attitude, with some stating that features favored by lenders, such as transparent paper records, are already built into digital assets.

• Redfin Chief Economist Daryl Fairweather: "This is a significant victory for cryptocurrency advocates, as it grants digital assets the same treatment as other assets." Currently, stock investments are classified as qualified reserve assets, but lending institutions typically apply discounted valuations to highly volatile individual stocks or cryptocurrencies. "As long as the valuation is reasonably adjusted based on volatility, it is entirely feasible to include crypto assets in reserves."
• Chief Economist at Realtor.com, Danielle Hale: "If the two giants accept cryptocurrency as collateral, it will strongly push banks to change the current rules. Those who originally had to sell off crypto assets to meet standards—perhaps this was the key reason they gave up on buying homes—can now qualify for loans directly, which effectively expands the pool of eligible buyers."
• Blockware analyst Mitchell Askew stated that Bitcoin mining as a service: The asset's liquidity and transparent custody (i.e., its public blockchain) make it the "perfect collateral" for mortgage loans.

Some industry insiders have also expressed concerns about this.

• The company Strike, which offers Bitcoin-backed loans, stated that there are some risks associated with cryptocurrency loans in their current form. Volatility is a major factor. If the price of BTC drops significantly, the loan-to-value ratio will increase, "which could trigger a margin call or liquidation—being forced to sell at an inopportune time."
• A commentator believes that lending institutions also face risks: "The risk models in this area are simply insane. Traditional mortgage assumptions are that the borrower's income and assets are relatively stable. Now, you're dealing with borrowers whose net worth can fluctuate by 50% within a week. How do you stress test a portfolio when your collateral includes a variety of assets ranging from Bitcoin to random DeFi tokens?