In a groundbreaking move, the Federal Housing Finance Agency (FHFA) issued a directive on June 25, 2025, ordering Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that underpin roughly half of the $12 trillion U.S. mortgage market, to consider cryptocurrency as an asset in single-family mortgage loan risk assessments. This policy shift, which allows borrowers to use digital assets like Bitcoin and Ethereum without converting them to U.S. dollars, marks a significant step toward integrating cryptocurrency into mainstream financial systems. As the real estate market grapples with affordability challenges and sluggish sales, this decision could reshape homebuying dynamics, expand borrower eligibility, and introduce both opportunities and risks. This article explores the potential impacts of this policy on the real estate market, drawing on expert insights and current market trends.
Expanding Borrower Eligibility and Market Liquidity
One of the most immediate effects of this directive is the potential to broaden the pool of eligible homebuyers. Historically, Fannie Mae and Freddie Mac required cryptocurrency to be converted into U.S. dollars and held in regulated financial institutions to be considered for mortgage reserves. The new policy eliminates this requirement, allowing borrowers to leverage crypto holdings stored on U.S.-regulated centralized exchanges as part of their financial profile.
This change could be a lifeline for crypto investors, particularly younger or tech-savvy individuals whose wealth is tied to digital assets. “If Fannie and Freddie are going to accept cryptocurrency as collateral, that’s a strong incentive for banks to shift their practices,” said Danielle Hale, chief economist at Realtor.com. By recognizing crypto as a legitimate asset, lenders can assess a borrower’s full financial picture, potentially qualifying more people for loans without forcing them to liquidate volatile holdings.
The housing market, which has been stagnant since early 2022 with home sales hitting a 30-year low in 2023, stands to benefit from increased liquidity. A National Association of Realtors survey found that only 1% of home down payments between mid-2023 and mid-2024 came from crypto sales, indicating untapped potential. By enabling crypto holders to use their assets directly, this policy could stimulate demand, particularly in markets with high concentrations of tech workers or crypto investors, such as San Francisco, Austin, or Miami.
Boosting Crypto Adoption and Market Confidence
The FHFA’s directive signals a broader acceptance of cryptocurrency in traditional finance, aligning with the Trump administration’s vision to make the U.S. the “crypto capital of the world.” This move could enhance confidence in digital assets, encouraging more Americans to invest in cryptocurrencies knowing their holdings can contribute to major financial decisions like homebuying.
Moreover, the policy may incentivize high-net-worth individuals to move their crypto assets to U.S.-regulated exchanges, increasing compliance and transparency in the crypto market. Petr Kozyakov, CEO of digital payment platform Mercuryo, noted that this decision reflects the sector’s progress, with centralized exchanges already offering traceability and security critical for financial integration. As a result, the real estate market could see an influx of crypto-backed transactions, further normalizing digital assets in everyday finance.
Risks and Challenges: Volatility and Regulatory Hurdles
Despite its potential, integrating cryptocurrency into mortgage assessments introduces significant risks, primarily due to the asset class’s volatility. Amanda Fischer, policy director at Better Markets, highlighted that “it’s not uncommon to see 40 to 50 percent price swings within a trading day.” To mitigate this, the FHFA requires Fannie Mae and Freddie Mac to develop methodologies for valuing cryptocurrencies, applying haircuts, and adjusting for daily price fluctuations. Lenders may discount crypto assets based on their volatility, similar to how they treat individual stocks, to ensure underwriting standards remain robust.
Critics warn that tying home loans to crypto’s price swings could destabilize the housing market. A post on X cautioned that this policy “could tie home loans to crypto’s wild swings, risking a new subprime crisis down the line.” The 2008 financial crisis, which led to Fannie and Freddie’s government conservatorship, serves as a stark reminder of the dangers of lax lending standards. Regulators and lenders will need to balance innovation with caution to avoid repeating past mistakes.
Additionally, the restriction to U.S.-regulated centralized exchanges excludes self-custodied crypto, sparking criticism from some in the crypto community who value decentralization. Developing shared standards for assessing the value and liquidity of digital assets will be critical to ensuring fairness and stability.
Long-Term Implications for Real Estate Innovation
Looking ahead, this policy could pave the way for broader innovations in real estate. Kozyakov predicts that digital assets may eventually be used for initial mortgage payments or integrated into blockchain-based infrastructures for buying and selling property. Companies like Ledn and Figure have already originated millions in crypto-backed mortgages, and federal support could spur larger banks to follow suit.
The policy also aligns with broader market trends, such as JPMorgan’s plans to allow crypto-based products as collateral and Circle’s USDC stablecoin becoming eligible for futures trading. These developments suggest a future where digital assets play a central role in real estate transactions, potentially streamlining processes and reducing costs through blockchain technology.
Impact on Housing Affordability and Market Dynamics
While the policy aims to expand homeownership, its impact on affordability remains uncertain. With 30-year fixed mortgage rates at 6.77% and a persistent shortage of housing supply, high borrowing costs continue to sideline buyers. The FHFA did not clarify whether this policy would lower loan costs, and some experts warn that increased demand from crypto holders could drive home prices higher in already competitive markets.
Furthermore, the potential privatization of Fannie Mae and Freddie Mac, a topic resurfacing under the Trump administration, could complicate the policy’s rollout. Privatization might raise mortgage rates and introduce uncertainty, counteracting the benefits of crypto integration. Economists urge careful oversight to avoid destabilizing the housing finance system.
A Final Word : A New Era for Real Estate
The FHFA’s directive for Fannie Mae and Freddie Mac to consider cryptocurrency in mortgage risk assessments marks a turning point for the real estate market. By expanding borrower eligibility and injecting liquidity, this policy could revitalize a sluggish housing sector while cementing cryptocurrency’s role in traditional finance. However, the risks of volatility, regulatory gaps, and market instability demand rigorous safeguards.
As Fannie Mae and Freddie Mac develop their proposals, the real estate industry stands on the cusp of transformation. Whether this move catalyzes widespread crypto adoption or introduces unforeseen challenges, one thing is clear: the intersection of digital assets and homeownership is poised to redefine the American dream in 2025 and beyond.
