A coalition of Senate Democrats is mounting fierce resistance against Federal Housing Finance Agency (FHFA) Director William J. Pulte’s directive that would allow Fannie Mae and Freddie Mac to consider unconverted cryptocurrency assets in mortgage underwriting decisions.
Senators Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Mazie Hirono (D-HI), and Bernie Sanders (I-VT) delivered a scathing letter to Pulte last week, warning that his crypto-friendly policy could destabilize the entire housing ecosystem.
The unprecedented move has sparked intense debate about the intersection of digital assets and America’s housing market stability. Their concerns center on cryptocurrency’s notorious volatility, liquidity constraints, and vulnerability to fraud—factors they argue make digital assets unsuitable for mortgage qualification purposes.
“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 declared in their strongly-worded correspondence.
The lawmakers systematically dismantled the rationale behind Pulte’s FHFA directive, highlighting fundamental flaws in treating volatile digital assets as reliable financial reserves. They emphasized that current federal mortgage standards explicitly require cryptocurrency conversion to U.S. dollars with proper documentation before consideration—a safeguard Pulte’s directive would circumvent.
Controversial Crypto Directive
The senators painted a troubling scenario where borrowers holding cryptocurrency reserves might find themselves unable to convert assets to cash when needed, particularly during market downturns when liquidity evaporates. This timing mismatch could dramatically increase default risks, potentially triggering cascading effects throughout the housing market.
Adding urgency to their concerns, the lawmakers cited cryptocurrency’s susceptibility to scams, cyber theft, and hacking incidents, noting that victims often have little recourse for recovery. They referenced the spectacular failures of crypto-exposed banks in 2023 as cautionary tales of what happens when traditional finance intersects recklessly with digital assets.
Pulte’s original FHFA directive, issued in late June, reflected the Trump administration’s broader push to position America as the “crypto capital of the world.” In announcing the policy, Pulte declared: “I want people who own cryptocurrency to be able to buy homes like everyone else. I believe cryptocurrency is an asset.”
Political Pressure Intensifies
Beyond systemic risks, the senators raised explosive ethical concerns surrounding Pulte’s dual role as both FHFA Director and Chairman of Fannie Mae and Freddie Mac’s boards. This concentration of power, they argued, creates potential conflicts of interest that could compromise independent oversight of such consequential policy changes.
The letter revealed that Pulte’s spouse reportedly holds up to $2 million in cryptocurrency assets, raising additional questions about personal financial interests influencing regulatory decisions. The senators demanded transparency about the directive’s development process, criticizing what they characterized as FHFA’s secretive approach that bypassed stakeholder input and risk analysis.
The lawmakers set an August 7, 2025 deadline for Pulte to respond to their comprehensive list of questions, including whether FHFA conducted formal risk assessments or consulted with mortgage insurers and mortgage-backed securities investors who would bear the consequences of increased defaults.
