👋👋 Good morning real estate watchers! Today, we will discuss how cryptocurrency may soon be accepted as collateral for mortgages. This is like building your house on a foundation of Jell-O, except the Jell-O is Dogecoin, and the builder is a 22-year-old YouTuber named CryptoKev who just said ‘trust me bro’ before disappearing to Dubai.

But first, here’s what we’ve been paying attention to this week…

1️⃣ Taxing Matters: Property tax revenue for state and local governments grew to $203B in Q1 2025, representing a 5.2% annual increase, but the growth rate has notably slowed compared to previous periods. Property taxes remain the largest revenue source for local governments, accounting for 37.8% of total tax collections. (NMN)

2️⃣ Geriatric Gentrification: 2.4M seniors (aged 65+) have entered the rental market over the past decade, representing a 30% increase and outpacing every other generation, driven by factors like fixed incomes, rising housing costs, and the appeal of low-maintenance, senior-friendly rental communities. (Realtor.com)

3️⃣ Job Market Shenanigans: The June 2025 jobs report revealed a surprisingly resilient labor market with 147,000 jobs added and unemployment dropping to 4.1%, despite growing recession concerns and cautious employer sentiment. (Realtor.com)

4️⃣ Another High: Pending home sales dropped 3.5% year over year as U.S. home prices hit a record \$399,633, though falling mortgage rates and rising buyer interest suggest renewed market activity. (Redfin)

5️⃣ Another Low: Despite a pandemic-era building surge, the U.S. housing deficit grew by 159,000 homes in 2023 to 4.7 million, as demand from newly formed households continues to outpace supply, leaving millions, especially millennials, still living with non-relatives. (Zillow)

TOP STORY

Last month, a tech entrepreneur in Miami reportedly tried to use $200,000 in Ethereum to qualify for a mortgage on a $1.2 million condo. The lender, confused but curious, requested that the crypto be converted into U.S. dollars. By the time the ETH cleared, the price had dropped 12%, and so did his chances of securing the loan.

But now, that kind of digital detour may soon become unnecessary.

In a move that could crack open the door to a new frontier in home financing (or usher in a volatility-riddled nightmare), the Federal Housing Finance Agency (FHFA) has ordered Fannie Mae and Freddie Mac to begin developing a framework to consider cryptocurrency as a legitimate asset in mortgage risk assessments. Translation: Your Bitcoin might soon help you qualify for a 30-year fixed.

Yes, like us, you’re thinking that crypto-backed mortgages are the financial version of mixing Red Bull and tequila. It’s innovative. It’s high energy. And it absolutely guarantees someone will vomit on the housing market.

William Pulte, the new FHFA director, signed the order on June 25, instructing the mortgage giants to “prepare their businesses to count cryptocurrency as an asset for mortgage.” In a social media post, Pulte called the move part of President Trump’s push to make the U.S. “the crypto capital of the world.”

It’s a pivot with potentially massive implications for the housing market, borrowers, and real estate professionals alike, and it comes with no shortage of risks.

Historically, crypto assets have been persona non grata in the mortgage underwriting process. If borrowers wanted to use them, they first had to liquidate their holdings into U.S. dollars, effectively forgoing potential future upside and possibly triggering significant tax consequences.

And Americans were doing so…

Under the new guidance, that step may no longer be required. As long as crypto holdings are stored on a U.S.-regulated centralized exchange (think Coinbase, Kraken) and can be verified, they’ll be treated as part of the borrower’s financial profile. That means crypto could count toward reserve requirements (the funds borrowers are required to have on hand after closing).

“This is a big win for advocates of cryptocurrencies who want crypto to be treated the same way as other assets are,” said Daryl Fairweather, Chief Economist at Redfin. “As long as lenders are appropriately discounting crypto based on volatility, it’s fine that crypto investments count toward reserves.”

That’s a big caveat. Because if there’s one thing crypto and real estate don’t have in common, it’s price stability.

Currently, stock portfolios are accepted as proof of assets, but volatile assets are often heavily discounted. A $500,000 tech stock portfolio may be underwritten as worth $300,000. Expect crypto to be treated similarly, or more conservatively.

Bitcoin, the largest cryptocurrency by market capitalization, dropped 16% in a single week in February. But, it also just reached a record high of $112,000. Solana has seen swings of 40% in a matter of days. Tying mortgage eligibility to such instability introduces risk into an already fragile housing finance system.

Danielle Hale, Chief Economist at Realtor.com, sees the benefits and the tradeoffs: “It sort of expands the potential pool of eligible buyers. Because people who might otherwise have to sell cryptocurrency to qualify… under this new policy, they can qualify.”

But that broader pool may include borrowers whose wealth is a screenshot one day and a sob story the next.

Fannie Mae and Freddie Mac back more than half of the $12 trillion U.S. mortgage market, so any shift in their underwriting standards reverberates deeply throughout the housing ecosystem. Mortgage lenders follow their lead because loans that meet their criteria are easier to sell, providing liquidity and reducing risk.

If banks begin factoring in crypto holdings, we could see a marginal expansion in credit access, particularly among younger, tech-savvy buyers who hold digital assets but lack traditional savings. According to the National Association of Realtors, only 1% of buyers used crypto proceeds for down payments between July 2023 and June 2024.

That number could rise if crypto becomes a regular part of the mortgage toolkit. But the impact on demand may be modest at first, given crypto’s low liquidity and lenders’ natural aversion to volatility.

Critics warn that incorporating cryptocurrency into the mortgage ecosystem could invite trouble, much like what happened during the subprime era, when lax standards and inflated appraisals fueled a crisis.

“I don’t see this as a systemic threat — yet,” one senior housing finance analyst told WSJ, “but it starts to look that way if crypto prices crash and suddenly a wave of borrowers lose the reserves they were qualified on.”

It also raises new questions about regulation, fraud, and how to value digital assets in an environment where Dogecoin can shift from a joke to a jackpot overnight.

Then there’s the potential conflict of interest: public filings show Pulte’s spouse owns up to $1 million each in Bitcoin and Solana, raising eyebrows about personal stakes influencing national policy.

Crypto-backed mortgages aren’t quite here, but they’re officially on the drawing board. Whether they become a transformative financial tool or just another speculative sideshow will depend on execution, oversight, and a whole lot of market maturity.

For now, real estate professionals would be wise to brush up on their blockchain basics. And borrowers? Perhaps check your crypto wallet before your savings account; just don’t expect the bank to accept your Shiba Inu coin yet.