In recent years, cryptocurrencies have moved from the fringes of finance into more traditional arenas, including housing finance. A notable development occurred in mid-2025: for the first time, the U.S. housing finance regulator directed government-sponsored enterprises Fannie Mae and Freddie Mac to consider cryptocurrency assets in mortgage underwriting. This report examines that regulatory shift, its implications for the mortgage industry and housing market, and parallel efforts by private fintech and decentralized finance (DeFi) startups to offer crypto-backed mortgages. We include key dates, official statements, and expert commentary, as well as summaries of active projects and regulatory milestones.
Fannie Mae and Freddie Mac Move Toward Crypto Assets in Mortgages
Regulatory Directive (June 2025): On June 25, 2025, Federal Housing Finance Agency (FHFA) Director William J. Pulte – who oversees Fannie Mae and Freddie Mac – issued a directive requiring these mortgage giants to treat cryptocurrency holdings as assets in single-family loan risk assessments. In a post on social media and a signed order, Pulte instructed the enterprises to “prepare their businesses to count cryptocurrency as an asset for mortgage” in evaluating loan applicants. This marked the first time digital currencies would be treated akin to stocks or bonds in the U.S. mortgage system.
Under Pulte’s order, crypto assets can be counted toward a borrower’s reserves or collateralization without converting them to U.S. dollars, provided they are held on “a U.S.-regulated centralized exchange subject to all applicable laws”. In other words, an applicant’s Bitcoin, Ether, or other qualifying crypto holdings on compliant exchanges could help them qualify for a mortgage – no forced liquidation into cash required. “Considering additional borrower assets – such as cryptocurrencies – will enable Fannie and Freddie to assess the full financial picture of a borrower,” Pulte noted, adding that this could “facilitate sustainable homeownership to creditworthy borrowers”. Notably, the directive did not specify which cryptocurrencies would be eligible, leaving that determination for the proposals that the enterprises must develop.
Context and Motivation
FHFA’s move came as part of a broader federal shift toward digital asset integration. Pulte stated the crypto-friendly change is “in line with President Donald Trump’s vision to make the U.S. the crypto capital of the world.” Since the start of his second term, President Trump had pursued a pro-crypto agenda – including an executive order establishing a Strategic Bitcoin Reserve and a U.S. digital asset stockpile earlier in 2025. The directive to Fannie and Freddie aligns with this policy thrust. It also followed Pulte’s own expressions of interest in crypto; he had indicated just days earlier that FHFA would study crypto use in mortgages, then swiftly issued the order. (Public records also revealed Pulte’s spouse holds significant crypto investments, a fact noted by the press given potential conflict-of-interest concerns.)
Immediate Impact
The order took effect immediately on June 25, 2025, with Fannie Mae and Freddie Mac told to develop implementation proposals “as soon as reasonably practical.” In practical terms, this means the GSEs will be formulating underwriting standards for how to count crypto assets – likely including valuation haircuts to account for volatility – and updating their seller guides that lenders must follow.
Until now, lenders making loans for sale to Fannie/Freddie “have not typically considered a borrower’s crypto holdings until they were sold or converted to dollars.” Crypto wealth was effectively invisible in traditional mortgage applications unless liquidated. By signaling that crypto can be an eligible asset for reserve requirements or down payments, FHFA’s directive opens the door for borrowers to leverage their digital holdings without cashing out. “If Fannie and Freddie are going to accept cryptocurrency as collateral, that’s a strong incentive for banks to shift their practices,” observed Danielle Hale, chief economist at Realtor.com. “People who might otherwise have to sell cryptocurrency to qualify – and maybe that’s a deal-breaker for them – can now qualify. It expands the potential pool of eligible buyers.”
No Official Pilot (Yet)
It’s important to note that this is a regulatory mandate, not a voluntary pilot program by Fannie or Freddie. As of mid-2025, neither GSE had independently launched a crypto-collateralized mortgage product; rather, they are responding to FHFA’s order by crafting policy. (Any new product or pilot by the GSEs typically requires FHFA approval under a 2023 rule for vetting Enterprise products.) Industry observers expect that Fannie Mae and Freddie Mac will proceed cautiously and within the limits set by the directive.
Only crypto assets verifiable on regulated exchanges will count, and valuation discounts (“haircuts”) will likely be applied to account for crypto’s notorious volatility. In the directive, Pulte explicitly mentioned considering appropriate risk adjustments and the proportion of crypto relative to a borrower’s total reserves. We can anticipate that any proposal from the GSEs will include conservative criteria (e.g. only certain high-market-cap cryptocurrencies, maybe stablecoins, and significant discounts to market value when assessing crypto holdings).
Implications for the Mortgage Industry and Housing Market
Expanded Borrower Pool
Allowing cryptocurrency assets to count in mortgage underwriting could bring a new class of borrowers into the home-buying market. These are “asset-rich, cash-light” individuals – often younger, tech-savvy investors who have accumulated wealth in crypto but lack substantial traditional savings or credit history . Under previous rules, such borrowers might fail to qualify for a mortgage unless they liquidated their crypto (triggering taxes and forfeiting future upside). Now, crypto can bolster their balance sheet on paper, potentially enabling mortgage approval where before there was none.
“This is a big win for advocates of cryptocurrencies who want crypto to be treated the same way as other assets are,” said Daryl Fairweather, chief economist at Redfin. She noted that lenders already count stock portfolios as assets (albeit with discounts for volatility), and “as long as lenders are appropriately discounting crypto based on volatility, it’s fine that crypto investments count toward reserves.” In short, crypto will be slotted into existing asset calculations, likely with strict haircuts (just as a volatile stock might be given, say, 70% of its market value in underwriting). This change aims to “encourage banks to expand how they gauge borrowers’ creditworthiness” and not to exclude otherwise creditworthy buyers simply due to the form of their wealth.
Housing Market Stimulus (Modest)
The policy shift comes at a time when the U.S. housing market has been sluggish. Rising mortgage rates since early 2022 pushed home sales in 2024 to their lowest level in nearly 30 years, with more sellers than buyers in many areas. Regulators hope that tapping into crypto wealth could provide “a small boost” to housing demand. With roughly 20% of Americans now owning some form of cryptocurrency, according to industry estimates, this move could make home loans accessible to a segment previously sidelined.
If even a fraction of those crypto holders are enabled to buy homes, it could marginally increase sales in certain markets. “The U.S. housing market has been lackluster lately. Mortgage rates and house prices are both high, putting buyers off. But with one in five Americans now owning crypto, this could make home loans more accessible and push the market back up – or so regulators hope,” explained a Finimize financial briefing on the change.
That said, most experts do not foresee a wave of crypto-backed home purchases radically transforming housing overnight. Crypto assets will likely remain a niche qualifier at first. A recent National Association of Realtors survey (covering homebuyers from July 2023 to June 2024) found only 1% of buyers used proceeds from cryptocurrency sales for a down payment . In other words, crypto has so far played a minor role in housing finance. The FHFA’s policy may increase that share, but uptake will depend on how comfortable lenders and borrowers become with using crypto in this manner. Additionally, traditional underwriting standards (income, credit scores, debt-to-income ratios) still apply – crypto holdings are only one piece of the puzzle. This policy is more about not excluding crypto wealth from consideration, rather than treating crypto as a magic bullet for loan approval.
Risk Management and Volatility
A major implication is the need to manage the volatility risk that crypto introduces. By nature, cryptocurrencies like Bitcoin and Ethereum can swing wildly in price – 20% up or down in a week is not uncommon. Critics argue that accepting such volatile assets as loan collateral could “give [regulators] a few sleepless nights,” especially given the painful lessons of mortgage risk mismanagement in 2008. However, there are important mitigants:
Haircuts on Value
Lenders and the GSEs will almost certainly discount the value of crypto assets when calculating how much they contribute to a borrower’s reserves. Just as only a percentage of stock portfolio value is counted (to buffer against market drops), only a fraction of one’s crypto holdings might count. “Bitcoin’s drop from peak to trough can be 75–80%, and altcoins even worse,” noted Ledger Insights, highlighting why conservative valuations are critical . If, for example, $100,000 in Bitcoin is treated as (say) $50,000 of usable reserve after haircuts, the loan approval isn’t resting on the full volatile value.
Margin Calls and Monitoring
It’s likely that any crypto counted will need to remain pledged or at least monitored through closing of the loan. (The FHFA directive doesn’t detail this, but one can envision guidelines where if crypto value plunges pre-closing, the borrower must provide additional funds or risk loan denial.) Some fintech lenders already require continuous collateral maintenance on crypto-backed loans – for instance, if the crypto’s value falls below a threshold, the borrower must top it up or the lender can liquidate the crypto. Fannie/Freddie haven’t outlined such mechanisms yet, but stress-testing scenarios will be considered. This adds complexity: mortgages might need new protocols for checking crypto asset value fluctuations from application to closing.
Limits to Exposure
The GSEs may cap how much crypto can count. For example, they might say crypto can only fulfill up to a certain percentage of the reserve requirements or down payment, ensuring the borrower has some traditional funds at stake. Such details will emerge in the proposals Fannie and Freddie draft.
In sum, the industry will tread carefully. Bank regulators and central bankers, in fact, have generally tried to minimize linkages between crypto markets and the traditional banking system (to avoid contagion risk). Now that FHFA is nudging open the door, there is pressure to implement this in a way that doesn’t undermine mortgage stability. We may see additional guidance from the FHFA, and possibly input from other regulators, on capital treatment or risk capital charges for mortgages that count crypto assets.
Industry Reactions
The announcement garnered a mix of optimism and caution. Crypto market enthusiasts cheered it as a legitimizing step – Bitcoin’s price even jumped on the news, briefly trading above $107,000 (a 2.2% rise) as it was framed as another sign of mainstream acceptance . Housing experts, while acknowledging the potential new demand, warned against overestimating the impact. “Crypto’s famous price swings aren’t going anywhere soon, so providers will need to figure out how to stress-test home loans backed by assets known to rise or crash 20% in a week,” Finimize noted, tempering excitement with realism.
There’s also the question of what happens in a down market: if a borrower’s crypto holdings plummet post-loan, it doesn’t directly cause default (since those assets weren’t the primary collateral for the loan – the house is). However, it could correlate with broader economic distress or reduce the borrower’s financial cushion, indirectly affecting default risk. The consensus is that crypto will be treated as a supplementary asset, not a replacement for ability-to-repay assessments or the property’s value as collateral.
Regulatory Framework and Oversight
The FHFA will oversee how Fannie and Freddie implement this. Any plan they propose may go through a review and possibly a public comment process (especially if deemed a “new product”). This ensures transparency and that safety-and-soundness concerns are addressed. By extending eligibility to crypto assets, FHFA is effectively updating the definition of what counts as borrower reserves in a modern context. Only crypto held on U.S. regulated exchanges will count , which has the side-effect of encouraging borrowers to keep their digital assets in compliant venues. (Crypto on a hardware wallet or on an overseas platform would likely be excluded due to difficulty of verification and higher fraud risk.) This ties into a broader regulatory goal of bringing cryptocurrency into the regulated, auditable perimeter of finance.
Finally, it’s worth noting that this development is unfolding while Fannie Mae and Freddie Mac remain under U.S. government conservatorship (since 2008). They currently back roughly half of the $12 trillion U.S. home loan market . Any change in their underwriting standards has outsized influence. If crypto assets become an accepted part of mortgage applications, other lenders and financial institutions may follow suit even for loans not sold to the GSEs, simply due to industry standardization. In effect, FHFA’s move could set a precedent that extends beyond Fannie and Freddie’s domain, nudging the entire mortgage market toward cautiously embracing digital assets.
Implications for the Cryptocurrency Sector
Validation and Legitimacy
From the perspective of the crypto sector, Fannie Mae and Freddie Mac’s consideration of crypto is a significant stamp of legitimacy. It signals that cryptocurrencies are being accepted as part of mainstream financial “infrastructure,” not just speculative investments. If America’s largest mortgage buyers are willing to account for crypto, it suggests a future where digital assets sit alongside bank accounts, stocks, and bonds in personal finance. “When fringe becomes mainstream” is how one analyst described this moment – what was once a niche idea (using crypto for a house loan) is now endorsed by federal housing authorities. This could improve sentiment in the crypto market and encourage wider ownership, as people see more practical uses for their crypto holdings (e.g. “I can use my Bitcoin to help buy a home” is a powerful narrative for adoption).
Market Dynamics
There may be positive feedback between crypto and housing. If crypto holders start buying homes, that injects some new demand into real estate, and also ties the fortunes of the two asset classes a bit closer. Crypto’s volatility could even introduce a new variable for housing economists to watch: a sharp rise in crypto prices might translate to more affluent crypto investors looking to diversify into property (and now they can do so without liquidating), whereas a crypto crash might dampen some buying plans. These effects are likely small at first, but not negligible in certain tech-centric housing markets (think cities with many crypto investors).
The news in June 2025 coincided with bullish crypto momentum – Bitcoin had been reaching all-time highs that year – and some credit was given to the Trump administration’s crypto-friendly stance for boosting prices. Industry-friendly regulators and White House events with crypto leaders contributed to a favorable climate . The integration with mortgages can be seen as part of that policy continuum. In fact, Vice President J.D. Vance proclaimed at a Bitcoin 2025 conference, “with President Trump, crypto finally has a champion in the White House… we understand the full potential of the digital assets industry, not just as an investment… but as a driver of personal liberty for all our citizens.” Such high-level endorsement, combined with concrete actions like the FHFA directive, bolster the outlook for crypto as a permanent fixture in the financial landscape.
Innovation and New Services
The blending of crypto and mortgages is also prompting innovation. Fintech firms that straddle both worlds could find new opportunities. “If crypto does become fair game for mortgage approval, expect a new class of borrowers to emerge… For fintechs, it’d be a huge opportunity. Platforms like Milo, Ledn, and Figure could build crypto-native home loan products that plug directly into the federal system,” according to Finimize’s analysis .
In other words, fintech companies specializing in crypto-backed lending might interface with Fannie Mae and Freddie Mac by originating compliant crypto-considering loans and then selling them to the GSEs. This would give those startups a path to much greater scale (tapping into the GSE secondary market liquidity), while helping Fannie/Freddie fulfill the directive. We may see partnerships between traditional lenders and crypto companies, or new services where exchanges certify asset values to lenders. The directive implicitly boosts businesses that can safely custody and report crypto assets for underwriting purposes.
On the DeFi side, purely decentralized mortgage solutions remain nascent, but this development could inspire projects to bridge DeFi with traditional mortgage finance. It’s now conceivable, for instance, to have a protocol that verifies a borrower’s on-chain assets and provides that info to a bank in a compliant way for a GSE-backed loan. Crypto as collateral might also accelerate the tokenization of real estate debt – for example, mortgages that are backed in part by crypto might be packaged into new kinds of securities. While speculative at this stage, the blending of asset classes could spur novel financial products.
Caution for Crypto Investors
A word of caution resonates within the crypto community: using your crypto as collateral means those assets are effectively pledged and potentially at risk if things go south. Crypto investors value self-custody and independence, so entrusting coins to a lender or having them tied up in escrow (as would likely be required) is a trade-off. Moreover, if crypto prices soar after you’ve bought the house, you win on both fronts (home equity and crypto up); but if crypto prices crash significantly, you might face a scenario of needing to post more collateral or simply weather the hit to your net worth.
However, since the primary collateral of any mortgage is the house itself, a crypto-backed mortgage doesn’t mean the bank seizes your Bitcoin if you miss a payment – rather, it means the bank could liquidate your crypto if its value plummets below agreed reserve levels before a loan is made, or simply not count it anymore. Post-closing, the house is still the security for the loan; crypto is more of a qualifier than a directly liened asset in the context of GSE loans. This nuance will need to be clear to borrowers: crypto can help you get the loan, but it doesn’t replace your obligation to pay nor the bank’s right to foreclose on the home if you default.
Regulatory Scrutiny
As crypto becomes entwined with mortgages, it may attract more regulatory scrutiny to crypto markets themselves. For example, if a large number of mortgages start depending on crypto assets, regulators might be more inclined to monitor crypto exchange stability and pricing, since a crash could have knock-on effects (albeit likely limited) on mortgage portfolios.
This could strengthen calls for clear crypto regulation – something the industry has been craving. On the flip side, any high-profile mishap (e.g. a scenario where borrowers with crypto-heavy asset profiles default in large numbers) could prompt regulators to reverse course or impose stricter limits. For now, FHFA’s posture is experimental yet optimistic: it explicitly framed the crypto directive as “in the public interest” of expanding credit access . Other regulators (like the CFPB, OCC, or Federal Reserve) have not publicly opposed the move, but they will be observing outcomes closely.
In summary, the crypto sector stands to gain legitimacy and utility from this development, but with that comes responsibility. The onus is on both borrowers and lenders to use this new allowance prudently, ensuring that crypto’s volatility is managed within the traditionally stable, long-term arena of housing finance. If successful, it could further erode the barrier between digital and traditional finance, integrating crypto holdings as a normal part of one’s financial profile when making major life purchases.
Private Sector Initiatives: Crypto-Backed Mortgage Startups and Pilots
Even before Fannie Mae and Freddie Mac began warming to cryptocurrency, several private companies and fintech startups have been pioneering crypto-backed mortgages on their own. These firms recognized that many crypto-rich individuals faced hurdles in getting conventional mortgages and sought to bridge that gap. Below, we explore some of the key players and projects – and how their efforts align with or influence the GSEs’ approach.
Fintech Companies Offering Crypto-Backed Home Loans
A wave of fintech lenders emerged around 2021–2022 to offer mortgages or real estate loans using crypto as collateral. These firms operate somewhat differently from traditional banks: they typically require borrowers to pledge cryptocurrency, which the lender holds as security, and in return provide a home loan (often with little to no fiat down payment). Importantly, the borrower keeps ownership of the crypto (no need to sell it) – the lender simply has a claim on it if the borrower defaults or if the crypto’s value falls below certain thresholds. This model lets clients buy property while their crypto hopefully appreciates in parallel. Below is a summary of notable projects and their features:
Company (Launch Year) | Crypto Mortgage Offering | Status / Notable Milestones |
Milo – Miami, USA (2022) | Offers 30-year crypto mortgages with up to 100% financing (no cash down payment). Borrowers pledge Bitcoin (and in some cases Ethereum or certain stablecoins) as collateral instead of a traditional down payment. The loan is in USD, but the borrower can finance the entire home purchase with crypto – Milo holds the crypto and the client makes mortgage payments normally. Example: Pledge $500K in Bitcoin to buy a $500K house (100% LTV); keep paying over 30 years while still owning your BTC. Milo does not require selling the crypto, thus avoiding triggering taxable events and allowing the borrower to retain any price upside in their coins. Interest rates were advertised in the mid-single digits (~3.95%–5.95% initially for some loans) , and credit/income requirements were relatively flexible (crypto wealth compensating for limited credit history). | Launched Jan 2022 as the first U.S. crypto-mortgage provider . At launch, demand was high – Milo reported a long waitlist of applicants from over 60 countries . The Mayor of Miami praised the company for innovating in finance . By mid-2022, Milo had originated millions in these loans. It continues to operate, though scaling is careful due to crypto market volatility. |
Figure – Charlotte, USA (2022) | A fintech lender that unveiled Crypto Mortgage products in early 2022. Figure’s offering came in two flavors: “Crypto Mortgage” (allows a client to take a 30-year mortgage up to $20 million, with 100% loan-to-value – meaning you put up an equal amount of crypto as collateral for the loan) ; and “Crypto Mortgage PLUS” (allows using crypto for a portion of the loan – e.g. borrow up to 50% of your crypto’s value to make a 20% down payment, with the rest of the home price covered by a traditional mortgage). Figure’s system uses its proprietary Provenance blockchain to process and record loans . A notable feature is that loan payments can be made via the borrower’s crypto collateral if the borrower chooses , and Figure promised not to rehypothecate (re-lend) the pledged crypto . Interest rates were around 6% for a fixed 30-year term , with monthly collateral value checks and margin calls if crypto values drop. | Announced March 2022 (with a waitlist opening for customers) . Figure’s co-founder Mike Cagney stated on LinkedIn, “Any amount up to $20 million, for a 30-year mortgage… you put up $5 million in bitcoin or ether, we give you a $5 million mortgage.” The product launch garnered significant media attention (Fortune, CoinDesk, etc.), highlighting the first large-scale attempt by a fintech unicorn to marry crypto with conventional mortgages. Figure’s initiative demonstrated to regulators that such loans can be underwritten and serviced, albeit in a controlled manner. As of 2023, Figure was still in a pilot phase for direct crypto mortgages and had pivoted more toward home equity lines using crypto. The FHFA’s 2025 directive may give Figure an opening to collaborate with GSEs for broader adoption of its model. |
Ledn – Toronto, Canada (2022) | A global digital asset lending platform that developed a “Bitcoin-backed mortgage” product. The concept: a client’s Bitcoin plus the property serve as dual collateral for the loan. Loan amount = 50% of the combined value of the house and the bitcoin holdings . This essentially over-collateralizes the loan to protect against BTC volatility. For example:to buy a $1 million house, a borrower might pledge $500K in Bitcoin; Ledn would lend $500K (50% LTV), secured by both the house and the Bitcoin. Every two years the property value is reassessed and the loan terms can adjust accordingly rather than a fixed 30-year term. Ledn’s mortgage carries a higher interest rate than bank mortgages (initially expected to fall between standard mortgage rates and typical crypto loan rates (~9%) ). Borrowers can pay interest in USD or in stablecoin (USDC) if they prefer . This product is aimed at crypto investors who do not want to sell their bitcoin but want to tap its value to purchase or refinance real estate . | Revealed in Dec 2021 alongside Ledn’s $70M Series B funding announcement . Touted as “the world’s first Bitcoin-backed mortgage” product, it entered a pilot in early 2022 in the U.S. and Canada . Ledn aimed to originate $100 million of these mortgages by Q1 2022 . The product’s novelty was combining two forms of collateral; Ledn’s CEO noted this provides a more stable cushion and time to manage margin calls, since real estate is less volatile than crypto . The approach impressed investors and suggested a model that mitigates crypto risk by pairing with real assets. Ledn’s experience (and similar offerings by others) likely informed the discussion at FHFA – showing that including crypto can be done with conservative LTV ratios. The company’s trajectory was temporarily impacted by the 2022 crypto market downturn (which cautioned many lenders), but the concept remains a reference point for crypto-collateralized lending. |
Table 1: Selected Crypto-Backed Mortgage Offerings by Fintech Startups (features and milestones) .
In addition to the above, other entrants have made strides in this space. USDC.homes, for instance, launched as a platform to offer crypto-backed mortgages in Texas, accepting multiple cryptocurrencies (BTC, ETH, USDC, etc.) as collateral. It advertised rates from ~5.5% to 7.5% on 5-year adjustable and 30-year fixed plans and completed its first loan for an Austin home in 2022 (notably using a DeFi lending protocol, Teller, in the process). However, such projects have been small in scale, and some paused operations during bear markets. Traditional crypto lending firms like Salt Lending and the now-defunct BlockFi also extended USD loans against crypto collateral (useful for home purchases, though not 30-year mortgages) . These early private-sector efforts provided a proof of concept: they showed that there is borrower demand for using crypto in real estate, and that lenders can structure these loans with appropriate safeguards (over-collateralization, margin call mechanisms, shorter terms, etc.).
Influence on GSEs
The innovation by fintechs undoubtedly caught the attention of regulators and GSEs. Fannie Mae’s own research arm noted in a 2022 survey that 40% of mortgage lenders saw DeFi as having high potential to disrupt finance, yet only ~31% thought it likely that mortgage companies would accept cryptocurrency for payments in the near term . At that time, lenders were more interested in blockchain for efficiency (title records, identity) than for crypto assets as collateral. But as startups like Milo and Figure garnered headlines – and as crypto holdings became more common among the public – the conversation shifted. By demonstrating real-world loans, these companies arguably paved the way for regulators to become comfortable with the idea. They showed that, for example, a borrower could successfully make mortgage payments over time while their Bitcoin sat in escrow, or that risk could be managed with proper collateral ratios.
The FHFA’s directive in 2025 can be seen as the institutional system catching up with what the private market had started experimenting with a few years prior. In essence, FHFA is allowing Fannie and Freddie to do, at scale, what these fintechs have been doing in niche markets. The goals align in many ways: expand access to credit, modernize underwriting, and keep U.S. housing finance responsive to new forms of wealth. Where the startups had to operate outside the conventional system (often portfolioing the loans or using alternative funding), now there’s a possibility of integration – for instance, a fintech originator could make a crypto-collateralized loan and sell it to Fannie Mae, replenishing its capital to lend again. This would greatly amplify the impact of crypto mortgages.
GSE Mandates
However, alignment is not automatic. GSEs have strict mandates around stability and serving average homebuyers, whereas many crypto-mortgage startups targeted high-net-worth investors (some offered loans up to $5M or $20M, far above the conforming loan limits). Bridging these models will require adjustments. We might see the GSEs focus on moderate loan sizes and owner-occupied properties, even if crypto is involved – in contrast, some private crypto loans were for investment properties or second homes for wealthy international clients. The regulatory scrutiny and public mission of Fannie/Freddie will likely bring more standardization and prudence.
For example, a fintech could partner to offer a GSE-compliant crypto mortgage that meets all usual requirements (credit check, income verification, etc.) but simply counts crypto as reserves. That is a simpler proposition than the zero-down exotic loans of some startups. In fact, Forbes noted that under the FHFA’s order, “bitcoin, and a short list of compliant crypto holdings, could count towards the 5% minimum borrower contribution and reserve requirements for conventional loans” – implying the GSEs might initially allow crypto to cover what normally would be a buyer’s cash down payment or required post-closing reserves (usually a few months of mortgage payments in savings), rather than creating 100% LTV crypto loans. This kind of incremental approach would mirror how stocks and retirement accounts are treated in underwriting.
Industry Collaboration
We are also seeing traditional mortgage companies keep an eye on this trend. Large lenders like Rocket Mortgage or Wells Fargo have not yet announced crypto acceptance, likely awaiting clear guidelines. But smaller banks or non-bank lenders might jump in sooner, especially those already inclined to fintech partnerships. The first movers could gain a competitive edge in attracting crypto-wealthy borrowers. Realtor.com’s Danielle Hale pointed out that banks tend to follow Fannie and Freddie’s lead; once the GSEs signal crypto is acceptable collateral, “banks will shift their practices” to accommodate and compete . Some mortgage brokers have even started advertising expertise in handling crypto assets for home loans in anticipation of these changes.
Challenges and Outlook
Despite the enthusiasm, private crypto-mortgage startups have faced challenges, especially during crypto bear markets. When crypto prices dropped sharply in 2022, for example, it tested these models’ resilience. Some borrowers saw their collateral value plunge, forcing margin calls or additional collateral postings. Companies like Milo and Figure presumably had to set robust protocols for such events (e.g. requiring more BTC or even partial liquidation if values fell beyond a point). This period provided valuable data. It likely informed how future crypto mortgages will be structured – perhaps leaning towards conservative LTVs or requiring a mix of collateral (as Ledn did).
The alignment with GSEs’ goals – promoting homeownership while managing risk – will depend on absorbing these lessons. GSEs exist to provide liquidity to the mortgage market and expand access, but not at the expense of triggering undue risk (they are still haunted by the subprime crisis legacy). Crypto-backed loans must prove they can perform similarly to traditional loans. If they do, it’s conceivable that in a few years, crypto assets could become a routine part of mortgage applications, much like stock portfolios or mutual funds are today. The private sector will continue to innovate (for example, using stablecoins to make the process smoother, or leveraging blockchain for faster loan closing).
The table below highlights some key milestones and developments in this evolving arena, combining both private initiatives and regulatory actions:
Date | Development / Milestone | Significance |
Dec 15, 2021 | Ledn announces Bitcoin-Backed Mortgage (world’s first of its kind) . Ledn raises $70M to launch the product in early 2022. | Marks the first public introduction of a mortgage product collateralized by cryptocurrency. Signals investor confidence that Bitcoin can be used to back real estate loans . This is a catalyst that spurred other startups to consider similar offerings. |
Jan 18, 2022 | Milo Credit launches the first U.S. crypto-mortgage program , offering 30-year loans for home purchases with 100% crypto collateral and 0% down . | A major FinTech innovation in housing finance. Demonstrates practical deployment of crypto-backed mortgages in the U.S. market. Milo’s launch garners press and highlights the unmet demand from crypto-investors for mortgage solutions . |
Mar 23, 2022 | Figure Technologies unveils Crypto Mortgage products and opens waitlist . Also around this time, other lenders like LoanSnap (backed by investor Chamath Palihapitiya) experiment with issuing NFTs representing mortgage notes on blockchain. | Signifies growing industry acceptance of blockchain and crypto in lending. Figure’s high-profile entry (with loans up to $20M) adds credibility. Experiments with tokenizing mortgages (by LoanSnap and others) show a trend to put mortgage assets on-chain, potentially complementing crypto-collateral efforts. |
Q3 2022 | Crypto market downturn tests crypto-mortgage models. Bitcoin’s price fell ~70% from its peak, forcing lenders to adapt. Some initiatives slowed or paused. For instance, one report suggests Figure and USDC.Homes temporarily halted new crypto-mortgages amid volatility . | A stress-test period that revealed the risks. Lenders had to issue margin calls or set higher collateral requirements. It demonstrated that while conceptually sound, crypto-backed loans must weather price cycles. This period likely gave regulators caution, but also data on worst-case scenarios, informing safer guidelines in the future. |
Mar 2023 | FHFA implements “Prior Approval” rule for new GSE products (not crypto-specific, but ensures any novel programs, like a crypto pilot, get vetted). Also, Fannie Mae survey (2022-23) shows only 31% of lenders thought accepting crypto payments was likely by 2025 , reflecting industry skepticism at that time. | Indicates that by 2023, regulators were aware of emerging fintech products. The approval framework ensures GSEs can’t unilaterally dive into something like crypto without oversight – setting the stage that when crypto is considered, it will be via a controlled, official process (which indeed happened in 2025). The lender sentiment survey highlights the gap between fintech innovation and traditional lenders’ readiness. |
March 2025 | William J. Pulte becomes FHFA Director (appointed by President Trump). Pulte, coming from outside the traditional mold, shows interest in modernizing housing finance. (By Jan 2025, public disclosures showed his family had substantial crypto holdings .) | New leadership often foreshadows policy shifts. Pulte’s background and the pro-crypto stance of the administration set the stage for a dramatic pivot in GSE policy toward crypto. Industry observers start anticipating changes in early 2025, given the administration’s vocal support for digital assets. |
June 25, 2025 | FHFA issues directive to Fannie Mae and Freddie Mac to consider crypto assets in mortgage underwriting . This is accompanied by public statements on aligning with making the U.S. “crypto capital” . Bitcoin price hits an all-time high around this time , reflecting optimism. | Historic integration of cryptocurrency into federal housing finance policy. This is the first official green-light for crypto in the $12T U.S. mortgage market . Triggers broad media coverage (Reuters, AP, etc.) and is celebrated in the crypto community as a legitimizing event. It also kicks off a process within GSEs to develop practical guidelines, effectively mainstreaming the concept proven by fintechs. |
Table 2: Timeline of Key Developments in Crypto-Backed Mortgages (Fintech innovation and regulatory milestones) .
Looking Ahead
The convergence of private fintech innovation and public sector adoption suggests that crypto-collateralized mortgages are transitioning from experimental to achievable at scale. In the coming years, we will likely see hybrid models where traditional banks partner with crypto custodians to offer mortgages that meet Fannie/Freddie criteria. The experiences of early startups will help shape GSE standards on how much crypto to allow, which types (perhaps only highly liquid cryptos and maybe even stablecoins for stability), and how to manage operational issues like verifying ownership and locking up the collateral.
One can imagine a future mortgage application process where along with bank statements, a borrower might provide a statement from a crypto exchange or a blockchain attestation of their wallet balance – all to demonstrate their financial capacity. If mainstream lenders embrace this, it could also spur better infrastructure for crypto financial reporting. Regulatory frameworks will continue to evolve: beyond FHFA, other regulators may issue complementary guidelines (for example, bank regulators might clarify how banks should treat crypto assets in terms of capital requirements if they hold them as collateral). Internationally, other countries will watch how the U.S. implementation goes; some nations with high crypto adoption might follow suit in integrating crypto and housing finance if successful.
From an industry perspective, the entry of Fannie Mae and Freddie Mac into this arena could actually stabilize crypto-backed lending. The GSEs will bring standardized practices and potentially mitigate some risks by spreading them broadly (through securitization into mortgage-backed securities). It could also lower interest rates on crypto-backed mortgages over time – today’s fintech crypto loans often charge high rates (sometimes 6-9%+), partly due to novelty and lack of secondary market. If these loans can be sold to GSEs (which borrow at lower rates), borrowers might get more competitive pricing, making the product more attractive.
Conclusion
Recent developments show a clear trajectory: what began as a niche experiment by fintech and DeFi startups is now influencing national housing finance policy. Fannie Mae and Freddie Mac’s consideration of cryptocurrency marks a watershed moment in the acceptance of digital assets. Official pilot programs are still in the making, but the directive is a strong signal that crypto-collateralized mortgages are moving from concept to reality. The implications span multiple domains – the mortgage industry may gain new customers and tools, the housing market could see incremental demand (and new risk dynamics), and the crypto sector gains a powerful use case and legitimacy.
As with any innovation touching the foundation of the financial system, prudence and robust risk management will determine success. Early adopters in both industry and government are working through those challenges now. Over the next few years, we will learn how many homebuyers actually leverage crypto holdings and how well those loans perform. If positive, crypto-backed mortgages might become just another option in the home financing toolkit, one that reflects the 21st-century reality of how people store wealth. As FHFA Director Pulte wrote, it’s about “assessing the full financial picture of a borrower” – and for a growing number of Americans, that picture now includes cryptocurrency.
Sources:
- Reuters – “Regulator orders Fannie, Freddie to consider crypto holdings in loan assessments” (June 25, 2025) .
- Associated Press – “Fannie Mae, Freddie Mac ordered to consider crypto as an asset when buying mortgages” (June 25, 2025) .
- Fox Business – “US regulator directs Fannie Mae, Freddie Mac to consider cryptocurrency as an asset” (June 26, 2025) .
- Ledger Insights – “FHFA: crypto to be counted as mortgage collateral” (June 2025) .
- Finimize News – “Americans Might Soon Be Able To Use Crypto To Qualify For Federal Home Loans” (June 27, 2025) .
- National Mortgage Professional – “Milo Releases First-Ever U.S. Crypto Mortgage” (Jan 18, 2022) .
- CoinDesk – “Figure Technologies Reveals Crypto-Backed Mortgage Products” (Mar 23, 2022) .
- Blockworks – “Ledn Raises $70M, Launches Bitcoin-backed Mortgages” (Dec 15, 2021) .
- Unlock Blockchain (Unlock-BC) – “Crypto-Backed Mortgages: Homeownership with Blockchain Tech” (2023) .
- Fannie Mae Perspectives Blog – “Mortgage lenders discuss the intersection of blockchain and housing finance” (Mar 21, 2022) .
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