Bitcoin Mortgage: Revolutionary FHFA Move Ignites Hope for US Housing Market

For years, the dream of homeownership has felt increasingly distant for many Americans, especially with a challenging US housing market. But what if your digital assets, specifically Bitcoin, could unlock that door? A groundbreaking announcement from the US federal home loan regulator is set to change how we view mortgage qualification, potentially ushering in a new era for crypto home loans.

FHFA Crypto: A Game Changer for Mortgage Qualification?

The Federal Housing Finance Agency (FHFA), the primary regulator for Fannie Mae and Freddie Mac, is exploring how cryptocurrency holdings could assist mortgage seekers. Bill Pulte, the head of the FHFA, stated on June 23 that his agency would “study the usage of cryptocurrency holdings as it relates to qualifying for mortgages.” This declaration comes at a critical juncture, as the US grapples with a persistent housing crisis marked by declining mortgage applications.

While homeownership rates have remained relatively stable over the last five decades, the number of new mortgage applicants has seen a sharp decline. Although some specialized lenders already permit borrowers to use crypto as collateral, official study and acknowledgement from the FHFA would represent a significant leap forward for mainstream crypto adoption. This is particularly impactful given the current struggles in the mortgage sector.

The FHFA oversees a vast portion of the US mortgage market, with federal lending programs like the FHA alone issuing hundreds of thousands of single-family mortgages annually. Their endorsement could open up substantial opportunities for crypto holders to access these programs, which currently have strict guidelines regarding asset types for qualification.

Navigating the Turbulent US Housing Market

Pulte’s pro-crypto stance emerges amidst severe difficulties in the US housing market. Mortgage originations, the process of forming a mortgage loan, have plummeted to near-record lows. This decline, particularly in refinancing, is attributed to several interconnected factors:

• Insufficient Housing Supply: Construction is lagging behind demand, leading to a scarcity of available homes.
• Investor Purchases: A growing number of homes are being acquired by investors rather than prospective homeowners, further reducing inventory for individuals.
• Aging Homeowners: Elderly homeowners are increasingly choosing to remain in their homes instead of moving to senior living facilities, contributing to stagnant inventory.
• Rising Borrowing Costs: The Federal Reserve’s higher interest rates, implemented to combat inflation, have made borrowing more expensive and less accessible for many.

Pulte has openly criticized the Fed’s rate policies, even calling for the resignation of Chair Jerome Powell. Amid these economic headwinds, the FHFA is actively seeking innovative ways to make homeownership more feasible for a broader segment of the population.

Bitcoin Mortgage: Unlocking Homeownership with Digital Asset Collateral

The concept of using Bitcoin as collateral for a mortgage is gaining traction, especially with recent regulatory shifts. Until early 2025, most banks faced hurdles in offering crypto-backed loans due to Staff Accounting Bulletin No. 121 (SAB 121) from the SEC, which mandated that financial institutions count cryptocurrencies as a liability rather than an asset. Its swift repeal after President Donald Trump took office has paved the way for banks to potentially engage more freely with digital assets.

Despite this, federal programs like FHA, VA, and USDA loans still generally do not allow borrowers to use crypto as collateral. Some may even restrict the use of dollar liquidations from crypto sales for down payments, as noted by industry experts like Sam Cooling from 99Bitcoins. Personal finance expert Andrew Lokenauth advises meticulous documentation for anyone using Bitcoin proceeds for a down payment.

Bitcoin advocates see immense potential in its use as digital asset collateral. Mitchell Askew, an analyst at Blockware, highlights Bitcoin’s inherent liquidity and transparent custody via its public blockchain, deeming it “perfect collateral” for home loans. CJ Konstantinos, founder of People’s Reserve, a Bitcoin mortgage and bond company, believes Bitcoin could further derisk the mortgage-backed securities market overseen by the FHFA, calling it a “no brainer.” The transparent, auditable nature of Bitcoin transactions offers a clear paper trail that many traditional lenders prefer, potentially streamlining the collateral verification process.

The Future of Crypto Home Loans: Risks, Rewards, and Realities

While the prospect of crypto home loans is exciting, the market currently has a limited number of lenders offering such services. These niche providers often cater to the investor class of home buyers and come with specific risks that not all borrowers may be prepared for.

For instance, Milo (formerly MiloCredit) provides instant loan approvals for borrowers who can demonstrate sufficient crypto holdings to cover the entire loan value. Milo CEO Josip Rupena notes that many of their clients are purchasing second homes, vacation properties, or investment properties. These individuals often have strong incomes but might not qualify for the full value of these homes through traditional banks.

However, companies like Strike, which also offers Bitcoin-collateralized loans, openly acknowledge the significant risks, primarily volatility. A dramatic decrease in Bitcoin’s price can increase the loan-to-value ratio, potentially triggering margin calls or forced liquidations at unfavorable times. Lenders face their own challenges in developing robust risk models for assets whose net worth can fluctuate significantly in a short period.

Despite these challenges, crypto ownership in the US is on a clear upward trajectory. Lawmakers and regulators are increasingly working towards creating supportive legal frameworks for the industry. Recent studies, such as the National Cryptocurrency Association’s “2025 State of Crypto” report, indicate that crypto is no longer solely the domain of a few wealthy investors. An estimated 20% of Americans, approximately 65 million people, now own crypto, with 74% of these portfolios valued at less than $50,000. This growing mainstream adoption underscores the need for regulators like the FHFA to adapt.

Conclusion: A New Dawn for Homeownership?

The FHFA’s consideration of Bitcoin and other digital assets for mortgage qualification represents a pivotal moment for both the cryptocurrency and real estate sectors. As the US housing market seeks innovative solutions to its current challenges, integrating digital asset collateral could unlock homeownership for a significant and growing segment of the population. While risks, particularly related to volatility, must be carefully managed, the potential benefits—increased access to capital, greater financial flexibility for crypto holders, and a modernized mortgage system—are substantial. This move by the FHFA signals a future where your digital wealth could play a direct role in securing your physical home, potentially revolutionizing the path to homeownership for millions.