The Trump administration wants crypto to help you get a mortgage

Washington Post

5 hours ago

Mortgage behemoths Fannie Mae and Freddie Mac are poised to start counting cryptocurrencies as assets for mortgage loan risk assessments, opening up a new, untested path to securing home financing — and inserting crypto into the housing market.
Federal Housing Finance Agency Director Bill Pulte said Wednesday that cryptocurrencies 'may offer an opportunity to build wealth' outside of more traditional stock and bond markets, and that the move would help facilitate homeownership for creditworthy borrowers.
Up to now, crypto has been considered too unpredictable and volatile to be used for underwriting frameworks. Borrowers would instead have to liquidate those assets into dollars before closing for mortgage bankers to take their value into account.
Finance and housing experts largely viewed the move as a way to give the crypto industry a foothold in the housing market, particularly as it embraces President Donald Trump and exercises growing influence over politics. The change was made 'in keeping with President Trump's vision to make the United States the crypto capital of the world,' Pulte said in a post on X.
FHFA did not respond to questions about how many mortgages the change could affect, or whether such moves would make home loans more affordable. Pulte said the moves should be implemented 'as soon as reasonably practical,' and that changes were still subject to approval from Fannie and Freddie's boards and FHFA. Only digital assets stored on U.S.-regulated exchanges could be counted for assessing borrowing risk.
Still, the announcement left plenty of other questions, especially on how brokers and regulators would account for unpredictable pricing and cybersecurity risks that come with thousands of crypto tokens on hundreds of exchanges, said Amanda Fischer, policy director and chief operating officer for Better Markets, a left-leaning group that advocates for stronger market regulation.
'It's not uncommon to see 40 to 50 percent price swings within a trading day,' Fischer said. 'Using that as the basis for an underwriting decision really concerns me as point-in-time estimate of someone's wealth. It could change eight hours later.'
Fannie and Freddie don't make mortgage loans directly, but rather buy and package them into securities. Together, the companies guarantee about half of existing home loans and undergird much of the housing finance system. They've been under government control since the 2008 financial crisis, though the Trump administration is widely expected to try to end that arrangement.
The shift comes at an uncertain time for the mortgage market and economy overall. The average 30-year fixed-rate mortgage is at 6.77 percent, according to Freddie data released Thursday, about even with the prior week. Rates have stayed high, in part, because the Federal Reserve is holding off on lowering interest rates until it has more clarity on where the economy is headed. That has left rising housing costs, too little supply and steep mortgage rates to keep pushing buyers out of the market, or owners holding onto homes they bought when rates were at historic lows.
Meanwhile, Fannie and Freddie are in their own murky situation. There has been little concrete movement toward ending their government control. Last month, Trump posted on Truth Social that he was working on taking the companies 'public,' though the government would keep its implicit guarantee on Fannie's and Freddie's securities. Economists and housing experts warn that any changes to the companies' oversight should not raise uncertainty or spooks investors, since that could send rates even higher.
In a statement, the Mortgage Bankers Association said it welcomed the effort to 'modernize' the underwriting process.
'Crypto as a reserve asset is one option,' the group said. 'And there [are] many other impactful approaches to rethinking the underwriting of mortgage risk that should be included in the effort.'