How crypto could shape the future of mortgage lending

Crypto isn’t just for tech insiders anymore. These days, nearly one in five Americans has used or owns cryptocurrency, according to Pew Research. For many people, especially younger buyers, digital assets like Bitcoin or Ethereum are becoming an integral part of their everyday finances.

Now, that shift is starting to reach the mortgage industry as well. The Federal Housing Finance Agency (FHFA) has requested that Fannie Mae and Freddie Mac explore the potential inclusion of crypto assets in mortgage risk assessments. And the big news is that borrowers might not have to convert their digital assets into dollars first.

If you’ve been investing in crypto, this could open new possibilities when it comes to qualifying for a home loan. Let’s take a closer look at what this change means and how it might impact your next move in the housing market.

How mortgage lenders usually look at assets
When you apply for a mortgage, lenders want to understand your financial picture. They typically review your income, debt, and liquid assets, such as savings accounts, retirement funds, stocks, and bonds. These assets are easy to verify and stable enough to count toward mortgage qualification.

If you wanted to use investment accounts or other non-cash assets to help you qualify, you would usually need to sell those assets and show the cash in your bank account before closing. This process enables lenders to verify that the funds are genuine and readily available.

Up until now, cryptocurrency has not been part of the conversation. Its price swings and difficulty to verify made most lenders cautious. But that might be about to change.

What’s new with the FHFA’s crypto guidance?
The FHFA is asking Fannie Mae and Freddie Mac to develop plans that would enable them to consider cryptocurrency in mortgage evaluations. The key difference is that borrowers would not need to convert crypto into cash first.

This change is focused on digital assets stored on regulated U.S. exchanges with clear and verifiable reserves. That way, there is more transparency and less risk for both borrowers and lenders.

It’s still early days, but the message is clear. Digital assets are increasingly being recognized as part of mainstream financial life.

What does this mean for homebuyers?
If you’ve built up a good amount of crypto over the years, this could help boost your mortgage application in the future. You might not need to sell your crypto to qualify for a loan, which means you can keep your investment strategy intact while also gaining more flexibility as a buyer.

Of course, lenders will likely create new rules to manage the risks that come with crypto’s volatility. If the market shifts dramatically, your loan eligibility could be affected. Lenders may require additional documentation or reserve requirements to ensure everything balances out.

Still, this is a big step forward. It indicates that the mortgage industry is beginning to adapt to the way many people manage and grow their wealth today.

What’s next?
Fannie Mae and Freddie Mac still need to develop their proposals and get approval from the FHFA. So it may be a while before we see these changes in action. But the direction is clear. Digital assets may soon become an integral part of the conversation, and homebuyers with cryptocurrency are likely to have more options in the near future.

If you are holding cryptocurrency as part of your financial plan, now is a good time to stay informed. These updates could affect how you approach buying a home and give you chances to qualify for mortage financing when the time comes.

The mortgage industry is always changing, and the homebuying process is changing with it. Whether or not you use crypto, knowing your options and staying ahead of the curve can help you feel more prepared when you take the next step toward homeownership. Your PRMI loan advisor is always here to guide you through the financing process and help you find the right tools to make your homeownership dreams a reality. http://GetHomeFinancing.com