TLDR
- The Federal Housing Finance Agency is studying whether Bitcoin can help borrowers qualify for home loans.
- Mortgage originations in the US have dropped to near record lows since mid-2024.
- Rising interest rates and limited housing supply have made homeownership more difficult for many Americans.
- Some private lenders already accept Bitcoin as collateral for property loans.
- Federal mortgage programs currently do not allow Bitcoin for down payments or loan security.
The US housing market continues to struggle, prompting the Federal Housing Finance Agency (FHFA) to examine new borrower qualification methods. The agency is now reviewing whether cryptocurrency holdings, particularly Bitcoin (BTC), can support mortgage applications. This shift comes as mortgage applications decline and homeownership remains out of reach for many Americans.
Bitcoin Role in New Lending Models Gains Attention
The FHFA announced plans to study how Bitcoin holdings could assist potential borrowers in meeting mortgage eligibility requirements. This move follows years of tightened lending standards and stagnant mortgage origination numbers. As lending slows, regulators are evaluating all viable assets that could strengthen borrower profiles.
We will study the usage pf cryptocurrency holdings as it relates to qualifying for mortgages.
— Pulte (@pulte) June 24, 2025
While some boutique lenders already accept Bitcoin as collateral, federal programs have excluded it from underwriting guidelines. Borrowers using Bitcoin proceeds must often convert to fiat and maintain thorough documentation. These limitations have sidelined many crypto investors seeking to transition their digital assets into real estate.
By considering Bitcoin, the FHFA could open up significant opportunities for buyers with substantial crypto holdings. Institutional acceptance would mark a major shift in the lending environment and reflect broader adoption of digital finance. The agency’s current review signals an intent to modernize mortgage qualification criteria.
Mortgage Volume Declines Spark Broader Policy Shift
Mortgage originations in the United States reached record lows during mid-2024, with little recovery by early 2025. The housing supply shortage, driven by low construction rates and investor demand, has compounded access issues for homebuyers. Rising interest rates further intensified the slowdown in both purchase and refinancing activity.
As affordability drops, regulators seek ways to make borrowing more flexible while maintaining loan safety standards. Incorporating Bitcoin could improve access without compromising lending discipline. Borrowers with documented crypto wealth may benefit from expanded qualification metrics.
Current federal mortgage programs like FHA, VA, and USDA do not permit Bitcoin as a down payment or collateral. This exclusion limits financing options for many retail investors despite crypto ownership spreading widely. Introducing a Bitcoin-backed evaluation could ease restrictions for millions locked out of homeownership.
Bitcoin as a Transparent and Liquid Asset
Analysts highlight Bitcoin’s transparency, liquidity, and traceable ownership as attributes lenders could favor in mortgage risk assessments. The public nature of the blockchain provides a reliable source for verifying asset value and history. These qualities help meet underwriting standards centered on income, asset clarity, and borrower reliability.
Bitcoin-backed mortgage startups like Milo have already entered the market, targeting buyers of second homes and investment properties. Borrowers must show sufficient Bitcoin to cover full loan values, offering lenders strong collateral support. However, such lenders remain limited and serve only a niche investor base.
Despite some volatility, many industry experts argue that Bitcoin presents less risk than certain illiquid or unverifiable assets. Its growing legitimacy and retail use have transformed it into a mainstream financial instrument. Expanding mortgage guidelines to include Bitcoin could reflect this evolution.
Regulatory Landscape Shifts Following Policy Changes
The repeal of Staff Accounting Bulletin No. 121 in January 2025 removed key institutional barriers for crypto-backed loans. This rule had forced banks to treat crypto as liabilities, limiting their participation in digital asset lending. Its removal under the new administration opened doors for broader adoption.
Now, with Bitcoin gaining momentum in Washington, lenders anticipate updated regulations aligning with market demand. Lawmakers and financial bodies are pushing for frameworks that treat crypto similarly to other financial instruments. This regulatory clarity is crucial for expanding Bitcoin’s role in housing finance.
According to the National Cryptocurrency Association, around 20% of Americans now own crypto, most with holdings below $50,000. With rising adoption and growing retail demand, the FHFA’s review could drive real change in how Bitcoin fits into mortgage lending. The outcome may influence how traditional and crypto markets intersect in US housing.
