On December 1, Freddie Mac issued Bulletin 2021-36 to update lenders on changes in loan eligibility requirements. While it is not unusual for Freddie Mac to issue such bulletins, this bulletin contained changes pertaining to cryptocurrency.
Specifically, the bulletin stated that Freddie Mac updated its Seller/Servicer Guide (the Guide) to address “the use of cryptocurrency in the Mortgage qualification process.” Those updates state the following:
- Income paid to the borrower in cryptocurrency may not be used to qualify for the mortgage;
- For income types that require evidence of sufficient remaining assets to establish likely continuance (e.g., retirement account distributions, trust income and dividend and interest income, etc.), those assets may not be in the form of cryptocurrency;
- Cryptocurrency may not be included in the calculation of assets as a basis for repayment of obligations;
- Monthly payments on debts secured by cryptocurrency must be included in the borrower’s debt payment-to-income ratio and are not subject to the Guide provisions regarding installment debts secured by financial assets; and
- Cryptocurrency must be exchanged for U.S. dollars if it will be needed for the mortgage transaction (i.e., any funds required to be paid by the borrower and borrower reserves).
Despite consumers’ increased interest in cryptocurrency, these new statements demonstrate that Freddie Mac still sees a “high level of uncertainty associated with cryptocurrency” and wants to expressly limit its use within the mortgage qualifying process. Freddie Mac, however, concluded by saying it would, “continue to monitor cryptocurrency developments and may update these requirements as appropriate in the future.”