Fannie Mae and Freddie Mac, two major mortgage lenders, have been ordered by the Federal Housing Finance Agency (FHFA) to consider accepting cryptocurrency holdings from borrowers when buying mortgages.
Director William Pulte has instructed the agencies to prepare a proposal for considering crypto assets in their risk assessments. However, only crypto assets that can be evidenced on a U.S.-regulated centralized exchange subject to all applicable laws are to be considered.
The move aims to encourage banks to expand how they gauge borrowers’ creditworthiness, making it easier for more aspiring homebuyers to qualify for a mortgage. This change also recognizes the growing popularity of cryptocurrencies as an alternative investment option.
Currently, stock investments and other assets are treated equally in terms of reserves required by lenders. But cryptocurrencies have historically been viewed as riskier due to their volatility. With this new policy, banks may be more willing to consider crypto holdings as a source of funds for borrowers.
The FHFA’s decision is seen as a positive step for advocates of cryptocurrencies who want them to be treated equally with other assets. Experts believe that this change will benefit aspiring homebuyers by expanding the pool of eligible buyers.
However, the U.S. housing market has been struggling since 2022 due to rising mortgage rates and prices. As of April, there were nearly 34% more sellers than buyers in the market, according to Redfin analysis.
Source: https://apnews.com/article/mortgages-crypto-fannie-mae-freddie-mac-housing-285fad5490a59c3476f7908f444e9fe9