Americans can use cryptography to secure mortgages under the new Trump Rules
U.S. home buyers will soon be able to use cryptocurrency to secure mortgages under the new Trump administration order.
Straight Arrow News
With the rising costs of housing in America, many young people think they may not be able to afford a new home right now. But don’t worry, bitcoin (Cryptography: BTC) You can change all of that and make home ownership a reality.
At the end of June, the US Federal Housing Finance Agency issued a new directive, directing both Fannie Mae and Freddie Mac to count Bitcoin as an asset in their single-family home mortgage application. Previously, mortgage applicants had to convert their Bitcoin holdings to US dollars if they wanted to count their crypto.
Given the rapid price rise of Bitcoin over the past decade, this move could be a real game changer. This is why.
Home prices are out of control
Most people agree that America’s dream of buying a new home is currently out of reach. Home prices have skyrocketed, with higher interest rates preventing many mortgages from reaching many home buyers.
There is a lot of evidence to support this. In July 2024, a CNN survey reported that 86% of all tenants wanted to buy a home, but they couldn’t afford it. And 54% of them said “impossible” they could do.
This issue is even deeper for young homeowners facing economic slowdowns and persistent ideas that AI could come for work. Can they probably afford a new home?
Bitcoin as a hedge against inflation
And then Bitcoin appears in the photos. If you think the prices of new homes are rising sharply, what about Bitcoin prices? In 2022, Bitcoin priced at $17,000. Today, Bitcoin costs $107,000. If you bought Bitcoin, which was traded for under $100 in 2012, you could afford to buy any kind of home you could imagine today.
A new 30-second ad from Coinbase Global puts this point perfectly. Coinbase ads feature a beautiful two-storey pastel blue suburban home with well-maintained lawns. It’s something homeowners dream of. Voice Inston: “In 2012, you’ll need 30,000 Bitcoin to buy this house… 10 years from now, it will only cost you 20 Bitcoin… And today, it could be yours.” But the real kicker comes at the end of the ad: “If the price of a house continues to fall in bitcoin, why do they continue to rise in dollars?”
That’s why, in a nutshell, investing in Bitcoin can help you buy your next home. Bitcoin is a fired property and a potential hedge against inflation. Above all, Bitcoin is widely available to everyone. You don’t have to be a certified investor and don’t need millions of dollars. In fact, most cryptocurrency exchanges can start buying Bitcoin for just a few dollars.
How do the new rules work?
The US government is thinking about this out of the box. This new way of thinking about Bitcoin is part of the Trump administration’s larger vision to make America “global crypto capital,” according to William J. Prute, director of the US Federal Housing Finance Agency. And what is a better way to do it than bringing the American dream of American ownership into reality again?
For now, it’s just a directive and instructs Fannie Mae and Freddie Mac to keep busy with this. According to the text of this directive, it applies to all cryptography “certified and stored in a US-regulated central exchange.” And it gives Fannie Mae and Freddie Mac a bit of a wiggle room when it comes to adjusting risk, volatility, and overall market conditions.
One of the big winners of all these is the centralized cryptocurrency exchange, such as Coinbase. It’s still too early, but it appears that Bitcoin will not be able to list it as an asset for your mortgage application if it is stored elsewhere. So, for example, you cannot count Bitcoin in cold storage of hardware devices hidden under the bed.
Also, this directive does not mention the Spot Bitcoin ETF, so it will be interesting to see what happens here. With these ETFs, Bitcoin is held “indirectly” and not “directly.” So will this bitcoin count too? If not, it’s easy to imagine a scenario where people will stop buying spot Bitcoin ETFs and move to buying Bitcoin on Coinbase.
Get ready to buy a new home with Bitcoin
The really exciting part about this is that many top investors are hoping that Bitcoin will reach $1 million in the next five years. For example, Cathie Wood of Ark Invest believes Bitcoin will reach $1.48 million by 2030.
The current price of Bitcoin is over a 10x increase in a very short period of time, given the $107,000. With these types of benefits, you could be on your way to ownership of the home in just a few years.
Dominic Basulto has a position in Bitcoin. Motley Fool has a position and recommends Bitcoin. Motley Fool recommends Coinbase Global. Motley Fools have a disclosure policy.
The Motley Fool is a partner at USA Today, providing financial news, analysis and commentary designed to help people control their financial lives. The content is produced independently of USA Today.
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