For the first time, US mortgage giants Fannie Mae and Freddie Mac will permit applicants to use cryptocurrency holdings—namely Bitcoin and Ethereum—as part of their financial reserves when applying for home loans, subject to a series of rigorous conditions. This milestone policy, formalized by William J. Pulte, Director of the Federal Housing Finance Agency (FHFA) in a directive dated June 25, 2025, illustrates a cautious yet steady move toward integrating digital assets into the country’s traditional housing finance system.
Steep Discounts Apply to Crypto Assets Used as Reserves
The new FHFA guidelines do not treat the market value of cryptocurrencies at face value. Instead, due to the notorious volatility of digital assets, a significant “haircut” is imposed. For instance, if a mortgage applicant holds $100,000 in Bitcoin, only $40,000 to $50,000 of that sum is recognized as valid collateral. The framework, in effect, requires borrowers to hold roughly double the reserve amount in crypto to meet collateral criteria. This approach is designed to balance the potential risks of accepting unpredictable digital assets for home loan qualifications.
Strict Conditions Define Eligible Crypto Assets
Applicants must meet several key conditions for their crypto holdings to count as reserves. Acceptable assets must be held on US-regulated centralized exchanges—such as Coinbase, Kraken, or Gemini—and not in personally controlled wallets. Cryptocurrency stored in self-custody wallets remains outside the bounds of approval. In addition, applicants are required to verify their account ownership and document balances covering at least the previous 60 days using the exchange’s official API tools. Crypto held in staking services or locked within decentralized finance (DeFi) protocols cannot be used as collateral, thus excluding users who primarily safeguard their holdings independently or participate in such protocols.
Director William J. Pulte emphasized in his public statements that the regulation is designed to enable mortgage financing agencies to evaluate the complete financial portfolios of applicants offering collateral.
These conditions reflect regulatory efforts to ensure full transparency and accountability, placing a premium on easily traceable and auditable digital assets. Only liquid, exchange-verified cryptocurrencies will count, curtailing the inclusion of more speculative or less transparent holdings in mortgage applications.
Mortgage Process Now Includes Crypto—But With Limitations
Financial technology firm Better Home & Finance, along with exchange operator Coinbase, are among the first organizations to put this new process into action. Homebuyers no longer have to liquidate their digital assets to satisfy mortgage reserve requirements and can, in turn, avoid triggering tax liabilities that would result from asset sales.
During the application, the amount and ownership of crypto reserves are verified through official exchange documents. Buyers are generally expected to show reserves sufficient for two to six months of mortgage payments, depending on loan terms. For a $500,000 home, this equates to $15,000 to $45,000 in reserves. However, given the 50% value reduction applied, applicants would actually need around $90,000 in Bitcoin or Ethereum sitting on an approved exchange to meet the requirements.
While this provision is seen as a boon for high-net-worth cryptocurrency holders, everyday users or those preferring self-custody wallets might struggle to meet the reserve criteria. Freddie Mac is set to implement the FHFA’s new directions as well, and over time, it’s expected that decisions will be made regarding exactly which cryptocurrencies are included and whether the discount rates will differ depending on the asset.
Observers note that similar regulatory trends are accelerating globally, with the potential to reshape the landscape of housing finance by opening the door to innovative reserve mechanisms. That said, experts warn that the new framework remains largely untested in turbulent market periods, meaning the true reliability of crypto-backed reserves will only become evident over time.
