Freddie Mac Updates Guidance on Cryptocurrency

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Freddie Mac recently issued Bulletin 2021-36 to, among other things, update its guidance on the use of cryptocurrency in the mortgage qualification process.  The updated cryptocurrency guidance became effective on December 1, 2021.

The updated guidance provides, in part, that:

  • Borrowers cannot use income received in cryptocurrency to qualify for the mortgage transaction;
  • Regarding the types of income that require “evidence of sufficient remaining assets to establish likely continuance,” such assets may not be cryptocurrency;
  • The calculation of assets as a basis for repayment obligations cannot include cryptocurrency;
  • The borrower’s debt payment-to-income ratio must include monthly payments made on debts that are secured by cryptocurrency, but these monthly payments are not subject to the “Guide provisions regarding installment debts secured by financial assets;” and
  • If the borrower needs to use cryptocurrency funds for the mortgage transaction, the borrower must exchange the cryptocurrency for U.S. Dollars.

Freddie Mac noted that it issued these changes to clear up some of the uncertainty associated with cryptocurrency and stated that it will continue to make updates to the Guide, as appropriate, based on cryptocurrency developments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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