US adopts crypto in mortgage risks as Fannie Mae and Freddie Mac update asset models

US Federal Housing Finance Agency (FHFA) Director Willian J. Pulte ordered on June 25 that Fannie Mae and Freddie Mac treat cryptocurrency reserves as eligible assets when they measure risk on single-family mortgage loans, effective immediately.

The two government-sponsored enterprises must draft plans that show how they will recognize borrower crypto holdings without first converting the coins to dollars.

Strict collateral rules and board oversight

Pulte’s signed directive instructs each enterprise to limit recognition to cryptocurrency that sits in wallets controlled by US-regulated centralized exchanges. 

The order also requires the enterprises to add risk mitigants that account for market volatility and to keep reserve ratios that reflect the share of collateral held in digital assets. 

Additionally, each enterprise must secure board approval before it submits the completed proposal to the FHFA conservator for review. The order is effective immediately.

Fannie Mae and Freddie Mac purchase and securitize the majority of conforming US residential mortgages. Their risk models determine the amount of capital they must hold against potential credit losses. 

By allowing crypto reserves to enter those models, Pulte aims to widen the asset information available for underwriting and “facilitate sustainable homeownership to credit-worthy borrowers,” according to the text of the directive.

Risk-adjusted frameworks

The directive instructs each enterprise to develop an assessment that integrates crypto reserves into its existing loan risk framework. That assessment must describe how the enterprise will value cryptocurrency, apply haircuts, and adjust for daily price swings. 

The directive also requires an analysis of how crypto reserves interact with other borrower assets and liabilities. After board approval, each enterprise must send the proposal to FHFA for sign-off before implementation.

By invoking the authority to issue binding instructions that alter underwriting or capital standards, Pulte accelerated a process that otherwise would have needed rulemaking or legislative action. 

The order does not change conforming loan limits or documentation requirements but expands the categories of qualifying reserves.

Broader national crypto policy

Pulte announced the action on his social media account the same day, writing that he acted “in keeping with President Donald Trump’s vision to make the US the crypto capital of the world.” 

He added:

“Today is a historic day in the cryptocurrency industry.”

The directive follows months of internal study, according to Pulte’s remarks. The order does not specify which coins qualify. Still, the reference to US-regulated exchanges limits the pool to tokens listed on venues that follow federal know-your-customer and anti-money laundering rules.

Both enterprises must begin work on the proposals “as soon as reasonably practical,” the directive states. Pulte committed the agency to review each plan once the boards submit them but did not set a public deadline for submission. 

The order remains in force unless FHFA rescinds or modifies it.

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