US Senators raise red flags over crypto-driven mortgage expansion plans

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As lawmakers warn of the volatile shock across the U.S. housing finance system, the bold federal push to integrate crypto assets into mortgage underwriting has sparked a fierce backlash.

Warn US Senators: Crypto may unleash a new wave of housing system shocks

The rising policy shift that links crypto to housing finance has received insightful scrutiny from several US lawmakers as concerns grew about volatility risk, regulatory blind spots, and governance conflicts. US Senators Jeffrey Merckley, Elizabeth Warren, Chris Van Hollen, Massie Hirono and Bernie Sanders will write to Federal Housing Finance Agency (FHFA) Director William Palt on July 24, 2025, to evaluate Fannie Mac by dictating the June 25th directions to follow the June 25th directions.

Pulte has ordered Fannie Mae and Freddie Macs to consider validated cryptocurrency holdings on US regulated exchanges as eligible assets for mortgage applications. Lawmakers asked the FHFA to disclose the full risk analysis, the timeline and process of board approval, and the criteria for evaluating eligible cryptocurrencies. They also requested a comprehensive list of internal and external meetings on the topic, including the identities of consulted federal regulatory or non-government stakeholders, as well as measures to detect and prevent conflicts of interest. Citing the previous surveillance gap, the letter warned:

Expanding underwriting standards and considering private cryptocurrency assets could pose risks to the stability of the housing market and the financial system.

The senator noted that the directive could reintroduce the financial vulnerabilities seen in the 2023 bank failures, in which crypto-related exposures played a contributing role.

Lawmakers expressed particular concern about weaknesses in structural governance, pointing to Prute’s dual role as FHFA director and chairman of the Enterprise board. They highlighted that Pulte’s spouse holds up to $2 million in crypto assets, and made clear whether he pushed FHFA to consult with ethics officials or began refusing or selling. They ensured that policies that shape future crypto assets eligibility will be subject to strict and fair surveillance.

While seeking transparency, the senators accepted the narrow scope of the order. This limits eligibility for US-regulated central exchanges. They also recognized the guidance for FHFA companies to develop independent risk mitigators. Cryptographers argued that the thoughtful inclusion of digital assets would help expand mortgage access, particularly for digital native borrowers, taking the lending model a step forward with an evolving asset portfolio.