Fannie Mae accepts crypto-backed mortgages
Fannie Mae's decision to accept Bitcoin and Ether as collateral for mortgages is framed as a major milestone for the institutional credibility and 'moneyness' of crypto assets.
The argument
The hosts discussed that while the terms require a high collateralization rate (250% of the fiat down payment) and carry margin call risks that could result in losing one's home, the move unlocks capital efficiency and validates these assets as legitimate stores of value.
The thesis, stress-tested
✓ What validates it
- ✓Increased volume of crypto-backed mortgages processed by Fannie Mae
- ✓Other major mortgage backing institutions adopting similar policies
▸ Risks discussed
- ▸High volatility of collateral could trigger margin calls
- ▸Borrowers risk losing their homes if the collateral value drops below the required threshold
Hear it yourself
"So so the terms around here, if you're pledging something like Bitcoin, the initial collateral value must be, 250% of the fiat down payment. So if you're looking for a 100 k, a down payment for a mortgage, you have to pledge 250 k."
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