Regulator orders Fannie, Freddie to consider crypto holdings in loan assessments
The regulator overseeing Fannie Mae and Freddie Mac on Wednesday ordered the housing giants to consider cryptocurrency as an asset for single-family mortgage loan risk assessments, a move that could potentially open the door to borrowers using crypto investments to qualify for home loans.
William Pulte, the director of the Federal Housing Finance Agency, said in a social media post that he had ordered Fannie and Freddie to "prepare their businesses to count cryptocurrency as an asset for mortgage," which he said would be in line with President Donald Trump's vision of making the U.S. "the crypto capital of the world."
The FHFA oversees Fannie Mae and Freddie Mac, which have operated under U.S. government control since 2008 after suffering heavy losses during the subprime mortgage crisis. They guarantee over half of the nation's mortgages.
Cryptocurrencies are known for being highly volatile and are often subject to wild price swings, sometimes for no clear reason. In February, bitcoin - the largest cryptocurrency - suffered its biggest weekly fall in two years, dropping 16 per cent, although it has since recovered.
Trump has sought to overhaul U.S. cryptocurrency policy after courting cash from the industry on the campaign trail. Trump has appointed industry-friendly regulators and has hosted industry leaders at the White House. Cryptocurrencies have reacted favorably, with bitcoin reaching all-time highs this year.
In a directive signed Wednesday, Pulte said that considering additional borrower assets - such as cryptocurrencies - could enable Fannie and Freddie to assess the full financial picture of a borrower and could "facilitate sustainable homeownership to creditworthy borrowers."
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US regulator has ordered federal housing giants to consider cryptocurrency as an asset for single-family mortgage loan risk assessments. PHOTO: REUTERS NEW YORK - The US regulator overseeing Fannie Mae and Freddie Mac on June 25 ordered the federal housing giants to consider cryptocurrency as an asset for single-family mortgage loan risk assessments, a move that could potentially open the door to borrowers using crypto investments to qualify for home loans. William Pulte, the director of the Federal Housing Finance Agency (FHFA), said in a social media post that he had ordered Fannie and Freddie to 'prepare their businesses to count cryptocurrency as an asset for mortgage,' which he said would be in line with President Donald Trump's vision of making the United States 'the crypto capital of the world.' The FHFA oversees Fannie Mae and Freddie Mac, which have operated under US government control since 2008 after suffering heavy losses during the subprime mortgage crisis. They guarantee over half of the nation's mortgages. Cryptocurrencies are known for being highly volatile and are often subject to wild price swings, sometimes for no clear reason. In February, Bitcoin – the largest cryptocurrency – suffered its biggest weekly fall in two years, dropping 16 per cent, although it has since recovered. Mr Trump has sought to overhaul US cryptocurrency policy after courting cash from the industry on the campaign trail. He has appointed industry-friendly regulators and has hosted industry leaders at the White House. Cryptocurrencies have reacted favourably, with Bitcoin reaching all-time highs this year. In a directive signed on June 25, Mr Pulte said that considering additional borrower assets – such as cryptocurrencies – could enable Fannie and Freddie to assess the full financial picture of a borrower and could 'facilitate sustainable homeownership to creditworthy borrowers.' Mr Pulte's order did not specify which cryptocurrencies Fannie and Freddie should consider. Only digital assets held on US-regulated, centralised exchanges will qualify under the new guidance. Fannie and Freddie must design safeguards to account for crypto's volatility and submit their plans to the FHFA. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
