Head of Fannie Mae and Freddie Mac’s federal regulator says mortgage giants should consider what risk mitigation might be required when counting mortgage borrowers’ crypto holdings as an asset, “including adjustments for market volatility.”
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The head of Fannie Mae and Freddie Mac’s federal regulator has directed the mortgage giants to consider allowing borrowers to count cryptocurrency as an asset without having to convert their holdings into dollars.
In a post on the social media platform X Wednesday — Federal Housing Finance Agency Director Bill Pulte’s preferred channel for issuing official communications — Pulte said cryptocurrency is “an emerging asset class that may offer an opportunity to build wealth outside of the stock and bond markets.”
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Pulte is a crypto investor himself — in addition to millions of dollars in annual dividends from his stakes in Pulte Group and several heating and air conditioning companies, he listed $500,000 to $1 million in bitcoin among the assets he disclosed in a financial disclosure statement for executive branch personnel.
The order Pulte issued Wednesday directs both Fannie and Freddie “to prepare a proposal for consideration of cryptocurrency as an asset,” but only in cases where the assets are “evidenced and stored on a U.S.-regulated centralized exchange.”
Bill Pulte
Fannie and Freddie must also consider what risk mitigation might be required when counting mortgage borrowers’ crypto holdings as an asset, “including adjustments for market volatility and ensuring sufficient risk-based adjustments to the share of reserves comprised of cryptocurrency,” Pulte said.
The mortgage giants were instructed to submit any proposed policy changes regarding the treatment of crypto to their board of directors for approval — Pulte chairs both Fannie and Freddie’s boards — before submitting them to FHFA for review.
Commenting on Pulte’s proposal, Annapolis, Maryland based mortgage banker John Downs said asset reserves are not as much of a factor in obtaining loan approvals as they used to be.
“That prevents the crypto rug from truly impacting the borrowers ability to repay,” Downs wrote, alluding to the dramatic ups and downs in crypto valuations.
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