US Lawmakers Grill FHFA Over Crypto Home Loan Policy—Why This Could Be a Game-Changer
Crypto just stormed the mortgage industry's front door. The Federal Housing Finance Agency (FHFA) is under fire from US lawmakers—and the debate could reshape how home loans intersect with blockchain.
The Pressure Cooker
Politicians are demanding answers: Why is the FHFA dragging its feet on crypto-backed mortgages while traditional lenders still treat Bitcoin like a speculative meme? Critics argue outdated policies are blocking a $2T+ asset class from entering the housing market.
The Irony
Banks will gladly approve a mortgage for a McMansion bought with volatile tech stocks—but flinch at crypto collateral. Meanwhile, DeFi protocols quietly process billions in loans daily without a single credit check. Guess who’s winning?
The Bottom Line
This isn’t just about regulation—it’s about relevance. If the FHFA doesn’t adapt, the crypto industry will simply build faster, better rails around them. After all, nothing motivates innovation like bureaucratic inertia.
Senators Raise Red Flags Over Crypto In Mortgage Underwriting
In their sharply worded letter, the senators highlighted that current federal guidelines prohibit the use of unconverted cryptocurrency in mortgage underwriting. “Expanding underwriting criteria to include the consideration of unconverted cryptocurrency assets could pose risks to the stability of the housing market and the financial system,” the senators warned. They argue that crypto’s volatility, lack of regulatory clarity, and limited liquidity—especially during market downturns—could amplify risks for both lenders and borrowers. As the letter notes, “a borrower using crypto faces an increased risk that they may not be able to exit a crypto position and convert to cash at a price that WOULD allow them to buffer against risk of mortgage default.”
The lawmakers argue that the recent directive from FHFA Director William Pulte could disrupt the financial system’s stability by enabling lenders to consider unconverted crypto assets—assets that are volatile, hard to value in real-time, and prone to liquidity constraints.
Beyond financial concerns, the senators also questioned potential conflicts of interest between Pulte, the TRUMP Administration, and the cryptocurrency industry, particularly regarding his dual role as FHFA Director and Chair of the Enterprises’ Boards. These overlapping positions could allow for outsized influence in approving policies that lack independent scrutiny.
As the US inches closer to integrating this asset class into traditional financial frameworks, this letter signals intensifying scrutiny from lawmakers. With institutional adoption growing and regulatory frameworks evolving, the coming weeks will be crucial for determining how the US government balances innovation with systemic financial stability.
Total Market Cap Approaches $4 Trillion
The weekly chart of the total crypto market cap reveals a powerful uptrend, with the market currently sitting at $3.89 trillion—just shy of the psychological $4 trillion mark. After a steep rally that began in late 2023, the market has continued to push higher with strong bullish momentum, confirming a breakout from its previous consolidation phase.
All major moving averages (50, 100, and 200) are trending upward, and the price remains well above them. This suggests a healthy structure in both short- and long-term perspectives. The 50-week SMA at $2.95 trillion is now acting as solid macro support, underlining the strength of the current cycle.
Notably, this level also aligns with the prior all-time high region from early 2022, now flipped into support—an important technical signal in bullish cycles. Volume is increasing in the up weeks, confirming buying interest as the market gains traction.
Featured image from Dall-E, chart from TradingView
