U.S. Orders Inclusion of 'Virtual Assets' in Mortgage Loan Assessments

Share of Virtual Assets in Household Asset Portfolios Is Growing
Only Virtual Assets Held on Centralized Exchanges Are Recognized
A Signal for the Integration of Virtual Assets into the Traditional Financial System

CNBC reported on June 25 (local time) that the U.S. Federal Housing Finance Agency (FHFA) has instructed Fannie Mae and Freddie Mac to consider virtual assets held by borrowers as assets during the screening process for single-family mortgage loans.

According to CNBC, William Pulte, Director of the FHFA, stated in the guidelines announced that day, "Including additional assets such as virtual assets in the evaluation allows for a more accurate understanding of the borrower's overall financial situation," and added, "It will contribute to promoting the continued homeownership of borrowers with high credit scores."

Pulte particularly emphasized, "Virtual assets are an emerging asset that can accumulate wealth through different channels than stocks or bonds," and said, "Virtual assets are now occupying an increasingly larger share in household asset portfolios."

Currently, Fannie Mae and Freddie Mac are agencies that purchase and guarantee mortgage loans approved by financial institutions in the United States. They comprehensively review the borrower's income, credit score, and held assets to determine loan eligibility. The new guidelines mean that virtual assets must now be officially included in this evaluation process. However, the relevant virtual assets must be stored on centralized exchanges regulated within the United States and must be legally verifiable as owned by the borrower.

Until now, virtual assets have been excluded from loan assessments due to their high volatility, uncertain regulatory environment, and the difficulty of verifying holdings. In addition, before loan approval, borrowers had to convert virtual assets into U.S. dollars and provide proof of these as held assets.

According to the guidelines, Fannie Mae and Freddie Mac must prepare and submit proposals to the FHFA outlining their asset evaluation methods that include virtual assets.

Danielle Hale, Chief Economist at real estate information firm Realtor.com, commented on the measure, saying, "Now, there is a way for virtual assets to be recognized as assets without having to sell them," and analyzed, "As a result, the range of borrowers eligible to purchase homes will expand."

CNBC evaluated, "This measure signals a new era in which virtual assets are being fully integrated into the traditional financial system."