The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will now consider Bitcoin and cryptocurrencies in mortgage risk assessments. This significant change reflects the government's growing acceptance of digital assets. Director William J. Pulte stated that cryptocurrencies can indicate a borrower's financial health when properly documented. The directive mandates that assessments incorporate crypto assets without converting them to cash, marking a step towards facilitating homeownership for borrowers whose wealth is outside traditional banking. However, consideration of crypto volatility will also be necessary in risk evaluations.
Until now, Bitcoin has not typically been considered in the mortgage risk assessment process unless it was first converted into US dollars. Under the new directive, however, the FHFA acknowledges that digital assets, when properly documented, can serve as valid indicators of a borrower's financial reserves.
The directive instructs Fannie Mae and Freddie Mac to develop proposals for incorporating Bitcoin and cryptocurrencies into single-family loan assessments without requiring conversion to cash. Only Bitcoin and other crypto assets stored on US regulated centralized exchanges and compliant with applicable laws will be considered.
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