Great news for the crypto world! Bitcoin and Ethereum can now serve as a 'down payment' for buying a house!
The Federal Housing Finance Agency (FHFA) has instructed housing loan institutions to consider cryptocurrencies as assets for assessing risks in residential mortgage loans.
In simple terms, in the future, mainstream cryptocurrencies like Bitcoin and Ethereum in your wallet may be used to demonstrate your ability to repay loans, similar to your savings or stocks, helping you qualify for a mortgage.
Why is FHFA doing this? The main reason is that there are too few people taking out loans to buy homes in the U.S. right now; housing prices are high and interest rates are also steep, making it unaffordable for many young people. Thus, officials want to create an opportunity: to allow those who hold cryptocurrencies (but may not have much cash) to have a chance to buy homes. They believe that looking at crypto assets can provide a more comprehensive understanding of a borrower's financial situation.
There are also some limitations:
1. Only cryptocurrencies that can be traded on legitimate major exchanges in the U.S. (such as Coinbase) and can be proven to be in your possession will be considered.
2. Mortgages through certain government programs (such as Federal Housing Administration loans) cannot yet use cryptocurrencies.
For the crypto sector, this is an absolute boon, potentially attracting more people to use and hold crypto assets.
However, there are still significant challenges: the volatility of crypto assets is extremely high, with Bitcoin and others potentially soaring or plummeting by tens of percent in just a week. This poses a major challenge for lending institutions: collateral that is worth $1 million today might only be worth $500,000 next week, raising questions about risk management.
Since Trump took office, he has been working to promote the U.S. as the 'capital of cryptocurrency,' appointing officials who support the industry. This adjustment in mortgage policy is part of his policy direction. The ultimate effect will depend on specific rules and market reactions.