Bitcoin Mortgages: A $6.6 Trillion New Blue Ocean

On May 27, Cantor Fitzgerald launched a $2 billion Bitcoin collateral loan program for institutional clients, with the first trading partners including crypto companies FalconX Ltd. and Maple Finance. As one of the official underwriters of U.S. Treasury bonds, the entry of this century-old Wall Street institution is seen as a highly symbolic breakthrough.

Bitcoin is transitioning from a stock asset to a financial instrument that can influence the credit system.

Just a month later, Bill Pulte, the director of the Federal Housing Finance Agency (FHFA), sent out a significant signal. He has requested that Fannie Mae and Freddie Mac, the two pillars of U.S. housing credit, study the feasibility of incorporating cryptocurrencies like Bitcoin into the mortgage assessment system. This statement triggered a strong market reaction, with the price of Bitcoin rising nearly 2.87% within 24 hours, breaking through $108,000 again.

As posed in the Coinbase advertisement: "In 2012, you needed 30,000 Bitcoins to buy a house, and now you only need 5. If housing prices have been decreasing in Bitcoin terms, then why have they been rising in dollar terms?" What impact will this Bitcoin mortgage have on the dollar system?

Does Bill Pulte's words count?

Bill Pulte publicly called out Fannie Mae (FNMA) and Freddie Mac (FHLMC) on Twitter, urging these two companies to get ready. The Fannie Mae (FNMA) and Freddie Mac (FHLMC) mentioned here are two government-sponsored enterprises in the United States. Although they do not directly issue loans to homebuyers, they play a crucial "market maker" role in the secondary mortgage market by purchasing mortgages issued by private institutions, ensuring the liquidity and sustainability of the loan market.

The Federal Housing Finance Agency (FHFA), established after the 2008 subprime mortgage crisis, is responsible for regulating these two institutions. According to a research report by JPMorgan, as of December 2024, Fannie Mae and Freddie Mac have guaranteed a total of $6.6 trillion in agency mortgage-backed securities (MBS), accounting for 50% of all outstanding mortgage debt in the United States. The mortgages provided by Ginnie Mae, which are fully backed by the U.S. government and directly overseen by HUD, contributed $25 billion to MBS, representing 20%.

During Trump's first term, stakeholders discussed various reform proposals for GSEs (Government-Sponsored Enterprises), but no legislative progress was made. Pulte used the tone of "command" in his tweet because, as the chair of FHFA, he holds a "supervisory" board position in these two companies and implemented significant personnel and structural reforms after taking office in March 2025, relocating several directors from the two major institutions, self-appointing as chair of the board, and dismissing 14 executives, including the CEO of Freddie Mac, for a comprehensive restructuring. This significantly enhanced FHFA's control over GSEs and led to consultations with the White House and the Treasury Department to explore public listing proposals based on "implicit guarantees," which have far-reaching implications for the financial system. Now, FHFA is beginning to explore the inclusion of crypto assets in mortgage underwriting assessment systems, marking a structural shift in the regulatory attitude towards crypto assets.

Pulte's personal background adds a complex meaning to this news. As the third-largest residential construction company in the United States, PulteGroup's third-generation leader is an heir of a real estate family, just like President Trump. He is also one of the earliest federal officials among Trump's close associates to publicly support cryptocurrency. As early as 2019, he advocated for the charitable development of crypto assets on social media and disclosed his substantial holdings of Bitcoin and Solana. He has invested in highly volatile assets such as GameStop and Marathon Digital; unlike ordinary politicians, his investments seem to align more closely with the "Degen" image. Combined with his previous "crypto resume," it appears that he hopes to introduce crypto assets into the American home buying system is not just a passing fancy.

Internal Divisions Within the Government

On the other hand, there are significant divisions within the government. ProPublica reported in March that the U.S. Department of Housing and Urban Development (HUD) is also exploring the use of stablecoins and blockchain technology to track federal housing subsidy funds. A HUD official revealed that the driving force behind the blockchain initiative is Irving Dennis, the newly appointed Chief Deputy Financial Officer of HUD, who was previously a partner at the global consulting giant Ernst & Young.

Unlike "semi-official GSEs" like Fannie Mae and Freddie Mac, which are overseen by the FHFA, Ginnie Mae, managed by HUD, is a 100% government agency. Therefore, discussions in this area are also more rigorous. The proposal faced fierce internal opposition, with some arguing that it could trigger a crisis similar to the subprime mortgage crisis of 2008, and some officials even referred to it as "like handing out Monopoly money." An internal memo noted that HUD lacks neither auditing nor fund flow tracking capabilities, and that introducing blockchain and crypto payments would not only add complexity but could also lead to fluctuations in the value of the aid funds and even compliance issues.

Currently, platforms like Milo Credit and Figure Technologies are already offering mortgage products backed by Bitcoin. However, they are unable to securitize the loans for sale to Fannie Mae and Freddie Mac, resulting in high interest rates and limited liquidity. Once Bitcoin is incorporated into the federal mortgage underwriting system, it will not only reduce borrowing rates but also mean that holders can leverage the effect, shifting from "HODL" to "building family asset allocation in the United States".

Of course, the risks cannot be ignored. As former SEC official Corey Frayer warned, once unstable crypto assets are introduced into the $13 trillion mortgage system backed by the FHA, any decoupling event in market value could bring systemic shocks. Legal scholar Hilary Allen bluntly stated that using the most vulnerable groups as a testing ground to forcibly advance technological changes is extremely dangerous.

The core of this divergence lies in whether the United States is ready to officially incorporate Bitcoin from "alternative investment products" into the public financial system. The direction of the FHFA's research is to allow holders to directly use their Bitcoin balances to meet down payment or reserve requirements, which has profound implications as it is the first time decentralized assets have gained a "housing leverage" effect. On the other hand, the volatility of crypto assets inherently presents challenges in valuation and risk provisioning when used as "reserve assets". Furthermore, whether to allow their use in mortgage assessments in the event of severe Bitcoin price fluctuations involves issues of financial regulation, liquidity management, and even systemic stability.

What are the regulations of the new FHFA directive? How were U.S. residents using cryptocurrency loans before this?

Due to the painful lessons from the subprime mortgage crisis in 2008, current U.S. housing loan assessments have strict restrictions on asset compliance. This means that even if borrowers own cryptocurrency, it must first be converted to USD and held in a regulated U.S. bank account for 60 days before it can be considered "mature funds" for assessment. The direction proposed by Pulte clearly aims to break through this procedural barrier.

This official order, namely Decision No. 2025-360, requires the two mortgage giants to consider cryptocurrencies as a valid asset for borrower wealth diversification. So far, cryptocurrencies have been excluded from mortgage risk assessments because borrowers typically do not convert their digital assets into dollars before the loan ends. The directive requires Fannie Mae and Freddie Mac to develop proposals to incorporate cryptocurrencies into the borrower reserves in their single-family mortgage risk assessments. Furthermore, the directive stipulates that companies should directly calculate cryptocurrency holdings without converting them into dollars.

The Federal Housing Finance Agency (FHFA) has established clear "guidelines" regarding which cryptocurrencies meet the criteria for consideration. Only assets issued on U.S. regulated centralized exchanges and fully compliant with relevant laws are eligible. Furthermore, companies must include risk mitigation measures in their assessments, including adjustments based on known cryptocurrency market volatility and appropriate risk reductions based on the ratio of cryptocurrency reserves held by borrowers.

Before any changes are implemented, companies must submit their proposals to their respective boards for approval. After the board's approval, the proposal must be forwarded to the Federal Housing Finance Agency (FHFA) for review and final authorization. The FHFA's decision aligns with the federal government's broader approach to recognizing cryptocurrency in financial processes, consistent with Pulte's statement that "in response to President Trump's vision of making America the world's cryptocurrency capital," the issuance of this directive reflects its commitment to positioning the United States as a leading jurisdiction for cryptocurrency development.

What does this actually mean?

It is well known that the underlying logic of using a high-liquidity asset for staking in exchange for a low-liquidity asset is valid. However, BTC is at the center point of multiple dimensions of interests. When it can truly be certified as an asset for U.S. staking loans, its "influence" may be comparable to the power of the "Bitcoin Reserve Act" proposed before Trump's presidency. This influence will not be limited to a single group; various groups such as the American public, financial institutions, and government departments will all be affected.

How many Americans would use Bitcoin to "buy a house" and how much can they "save" by using Bitcoin as an intermediary?

Daryl Fairweather, the chief economist of the American real estate brokerage Redfin, stated, "Due to the abundance of time and a lack of exciting ways to spend, many people began trading cryptocurrencies during the pandemic. Some of these investments turned into bubbles, but at the same time, it allowed some individuals to gain significant wealth, or at least reach a level sufficient to pay for a down payment on a house."

According to the 2025 Cryptocurrency Consumer Report by Security.org, approximately 28% of American adults (about 65 million) own cryptocurrency, with a particularly high proportion among Gen Z and millennials, where more than half have owned or currently own crypto assets. As millennials and Gen Z increasingly represent a larger share of the U.S. real estate market, crypto assets may also become increasingly popular as a method of payment for purchasing homes.

In 2021, RedFin conducted a popular science survey, commissioning the research technology company Lucid to randomly sample 1,500 first-time homebuyers. Among the responses to the question "How did you accumulate your down payment funds?", the most common answer was "from wages" (52%), while less common responses included "cash donations from family" (12%) and "early withdrawals from retirement funds" (10%). Notably, the percentage of those who "sold cryptocurrency to buy a house" gradually increased from 2019 to 2021, reaching nearly 12% by the end of 2021. Four years later, with the popularity of cryptocurrency, this percentage may have further increased.

As for how much money can be saved, CJK, the founder of People's Reserve, shared a little story during a Twitter Space on June 25 with Emmy-nominated producer Terence Michael. In 2017, he sold 100 BTC to buy a house, and now that house is worth only $500,000, but the BTC he sold is now worth over ten million dollars. This opportunity led him to establish People's Reserve, with the aim of allowing more people to retain Bitcoin and buy houses through collateral.

This has also led to the emergence of such a thing.