The Trump administration wants to allow crypto-backed mortgages. Here's why

Core Insights - The average sales price for U.S. homes has remained around $400,000 since the end of 2021, leading many homebuyers to seek mortgages to cover these costs [1] - A new directive from the Federal Housing Finance Agency (FHFA) mandates that mortgage giants Fannie Mae and Freddie Mac develop proposals to consider cryptocurrency as an asset in mortgage risk assessments [2][3] - The FHFA's director, Bill Pulte, emphasized that this directive aligns with the vision to position the U.S. as a leader in the cryptocurrency space [3] Mortgage Assessment Changes - Traditionally, mortgage lenders have excluded crypto assets from their risk assessments, focusing instead on conventional assets like stocks and bonds [4] - The inclusion of cryptocurrencies in mortgage assessments may present challenges in risk evaluation, but lenders are accustomed to assessing various asset risks [4] - Senator Cynthia Lummis has shown support for the FHFA's directive, proposing legislation to formalize the inclusion of crypto in mortgage underwriting [4] Criticism and Concerns - The directive has faced criticism, with some arguing that allowing crypto-backed loans could introduce additional stress to the housing market [5] - A group of Democratic senators expressed concerns over the volatility of cryptocurrencies compared to traditional assets, questioning the FHFA's decision-making process [6] - The senators requested further information on the implications of the directive for the housing market and the potential risks involved [6]