FHFA Greenlights Crypto as Mortgage Reserves, Signaling Shift for Capital Markets — Evening Brief – 06.26.25 

The Federal Housing Finance Agency’s (FHFA) recent guidance allowing Fannie Mae and Freddie Mac to recognize verified cryptocurrency holdings as part of borrower reserves represents a significant shift in mortgage underwriting—one that could carry broader implications for capital markets and secondary mortgage buyers. 

While crypto assets will not be accepted for down payments or as qualifying income, their new eligibility as reserves introduces a more nuanced view of borrower liquidity. The move is poised to expand access to conforming loans for applicants who hold substantial digital assets but may lack traditional banking profiles. 

FHFA Director William J. Pulte highlighted the policy’s alignment with broader goals around digital asset leadership: “After significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage,” he posted Wednesday on X. 

For capital markets teams, the development may subtly reshape the collateral composition of mortgage-backed securities. Borrowers previously excluded due to unconventional asset holdings may now qualify, introducing a new cohort of borrowers with strong reserve profiles but higher reserve volatility. These changes could improve the risk-adjusted yield of some MBS pools—particularly in benign macro environments—but also introduce challenges for risk modeling and pricing, especially in bespoke or risk-transfer deals. 

The volatility of crypto remains a central concern. If reserve values decline sharply during market downturns, borrowers relying on them could experience impaired liquidity—especially if job loss or income shocks occur. Without loan-level data identifying crypto-linked reserves, MBS investors may lack the visibility necessary to properly assess downside risks. 

While some private lenders already accept crypto-backed reserves or collateral, formal recognition by the GSEs—under FHFA guidance—marks a milestone. It also comes at a time of weakening mortgage application volumes, potentially offering a growth lever for lenders seeking to serve digitally native borrowers. 

Though crypto’s overall footprint in GSE reserves is likely modest at present, its inclusion lays groundwork for broader integration into mortgage finance. For now, secondary buyers and capital markets desks may view the shift as credit-neutral with emerging upside—so long as risk management frameworks evolve in parallel.