The US Federal Housing Finance Agency (FHFA) is investigating whether digital assets companies such as Bitcoin should be considered in mortgage application processes.
FHFA director Bill Pulte announced The initiative on July 24 via X, and notes that the agency starts an assessment process to determine how crypto can be used in evaluations of housing loan.
According to him:
“We will study the use [o]f cryptocurrency holdings if it relates to qualification for mortgages. “
The FHFA regulates the American home financing system. It supervises large institutions such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Traditionally, mortgage insurers accepted the collateral, including the savings of the applicant, pension accounts and listed effects. However, cryptocurrencies have long been excluded due to market volatility and a lack of clarity of the regulations.
This development could considerably change the restraint of insurers, because the emerging industry could be recognized as a viable financial instrument for home financing.
In particular, the planned assessment is amid a broader wave of openness of regulations compared to crypto in the US, especially under the government of President Donald Trump.
How to reform crypto mortgage qualifications in the US
Although FHFA does not yet have to reveal how the crypto mortgage processes would be evaluated, Michael Saylor’s firm, strategy (formerly MicroStrategy), has that, that developed A Bitcoin credit framework that assesses risk using the price, volatility, loan period from BTC and a projected returns.
The model is designed to help settings to evaluate the strength of the borrower when digital assets are involved.
Industrial players have welcomed the move and pointed out that many digital power holders are confronted with obstacles when applying for mortgages.
Tristan Yver, the co-founder of the Backpack Crypto Exchange, noted That crypto holders often had to convert into Fiat and allow the funds to be in a traditional bank account – sometimes for months – before the lenders recognized.
According to him, this process slows down the financing and many holders in the long term forced to leave their crypto positions prematurely.
Anthony Apollo, who leads the Wyoming Stable Token Commission, reflected About these practices of major financial institutions.
For example, he shared that JPMorgan had to be converted and seasoned for a few months in a bank account before being taken into consideration in mortgage evaluations.
