INSUBCONTINENT EXCLUSIVE:
The United States Federal Housing Finance Agency (FHFA) will study whether cryptocurrency holdings could be considered in mortgage
agency is examining cryptocurrencies
government-sponsored enterprises, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation
If the agency allows borrowers to list Bitcoin (BTC), stablecoins or other tokens as eligible assets, it would integrate the asset class
deeply into traditional finance.Until Jan
23, most major banks were unable to offer crypto-backed loans or mortgages
disclose crypto assets held on behalf of clients as liabilities on their balance sheets.Source: PulteThis led to complications for banks,
since capital requirements are linked to the balance sheet contents
23, the SEC officially rescinded this controversial guidance, opening the doors to new crypto financial integration.Related: What are
crypto-backed mortgages, and how do they work?Crypto-backed mortgagesWhile crypto-backed mortgages already exist, they are specific products
offered by specialized companies
Those firms typically allow customers to borrow fiat money to purchase real estate or for other purposes, in exchange for locking digital
assets as collateral, usually with high collateralization requirements.In such a setup, if the digital assets chosen as collateral fall in
value, the customer often needs to add more assets to avoid liquidation in a margin call
With new guidance from the FHFA, we may soon see such offerings also from traditional banks, or even entirely new types of crypto-backed
a report released in late November 2024, a growing number of lower-income households are using gains from cryptocurrency investing to pay
Di Bartolomeo, co-founder of Bitcoin-backed loan company Ledn, recently told Cointelegraph that some Bitcoin holders are using crypto-backed
loans to purchase real estate without selling a single satoshi
He said those are generally high-net-worth individuals who do not meet the traditional criteria for real estate financing.Magazine: Home
loans using crypto as collateral: Do the risks outweigh the reward?
