Can You Use Crypto Gains as Income or Assets to Qualify for a Cash-Out Refinance?

Key Takeaways

• Fannie Mae and Freddie Mac have been directed to build cryptocurrency into their mortgage underwriting models, meaning verified crypto holdings may soon count toward reserves or income without forcing a sale.
• Most crypto holders qualify through an asset depletion loan, where holdings are discounted for volatility and converted into a monthly income figure, rather than pledged as collateral.
• Texas caps any cash-out refinance at 80% loan-to-value, requires a 12-day disclosure period before closing, and applies these rules only to homestead properties under Section 50(a)(6).

If you’re sitting on Bitcoin or Ethereum gains and considering a Texas cash out refinance, the rules are not what most headlines suggest. In June 2025 the FHFA directed Fannie Mae and Freddie Mac to build cryptocurrency into their underwriting models. That directive ordered proposals, not a rule change, and as of September 2026 both agencies still require crypto to be converted to U.S. dollars before closing.

Here is what a bitcoin mortgage actually is today, how crypto gains can support a loan file, and the Texas cash out refinance rules that apply either way.

As roughly one in five American adults now owns some form of cryptocurrency, and they’re looking to buy homes with their gains. In this post, we walk you through what a bitcoin mortgage actually is, how crypto gains can work as income or assets, and the specific rules Texas puts on cash-out refinancing.

What the FHFA Crypto Directive Changed, and What It Has Not

This shift didn’t happen by accident. In June 2025, FHFA Director William J. Pulte signed a directive ordering Fannie Mae and Freddie Mac to formally consider cryptocurrency as an asset in single-family mortgage loan risk assessments. Pulte said the move aligns with President Trump’s vision to make the United States the crypto capital of the world.

The directive is specific about how this works. It directs both housing finance giants to develop proposals that include digital assets, without requiring borrowers to liquidate them into U.S. dollars prior to a loan closing. That’s a big deal, because it means you may not have to sell your crypto and trigger a taxable event just to have it counted. 

However, the rule is also limited in scope. It restricts consideration to digital assets that are stored on U.S.-regulated, centralized exchanges and can be clearly evidenced. Fannie Mae and Freddie Mac still have to submit formal proposals for approval, so the rollout is happening lender by lender rather than all at once.

What Is a Bitcoin Mortgage or Crypto Mortgage?

A crypto mortgage is a home loan where your Bitcoin, Ethereum, or other digital asset holdings are used to help you qualify, either as income, as reserves, or in some cases as collateral. There are two main structures in the market right now:

• Asset depletion or asset-based crypto mortgages, where your verified crypto holdings are converted into a monthly income figure for qualification purposes, without ever pledging the coins.
• Collateralized crypto loans, where your Bitcoin or Ethereum is pledged against the loan, similar to a margin account, which usually means higher rates and the risk of a margin call if prices drop.

Most homeowners looking at a bitcoin mortgage for refinancing purposes prefer the first structure, since it lets you keep your coins invested and avoid an unwanted sale.

What Is a Crypto Refinance?

A crypto refinance simply means refinancing your existing mortgage using verified digital asset holdings to strengthen your file, either by supplementing your income or by adding to your reserves. It works the same way as a traditional refinance in terms of paperwork and appraisal, but your lender adds a crypto verification step: confirming ownership, source of funds, and the U.S.-dollar value of your holdings on a regulated exchange.

Can Crypto Count as Income? Asset Depletion Loan Rules Explained

An asset depletion loan lets you qualify on what you own rather than what you earn. The lender totals your eligible assets, applies its own discounts, and divides the result over a set number of months to produce a qualifying monthly income figure. No W-2, no employment income, no tax returns in the traditional sense.

The question for crypto holders is whether digital assets go into that calculation. As of September 2026, on a conforming loan, they do not.

Why Crypto Is Excluded From Agency Asset Depletion

Freddie Mac is explicit about it. Cryptocurrency may not be considered in the calculation of net eligible assets, either for the debt-to-income method or for the amount used as your qualifying income. That calculation is asset depletion, and crypto sits outside it.

Fannie Mae takes a different route and arrives somewhere similar. Virtual currency is acceptable for down payment, closing costs and reserves, but only once it has been exchanged into U.S. dollars, held at a U.S. or state regulated financial institution, and verified in dollars before closing. Sitting on an exchange, it does not count.

This is the part the headlines skipped. The June 2025 FHFA directive told both agencies to develop proposals for counting digital assets without forcing a sale. It did not change any guideline. Until those proposals are written into the selling guides, a conforming file still needs dollars.

Where Crypto Asset Depletion Actually Works

Non-QM and portfolio lenders set their own rules, and that is where crypto-supported asset depletion lives today. These programs are not bound by agency guidelines, so a lender that understands digital assets can count verified holdings without requiring you to sell. If you want your crypto to support the file while it stays invested, this is currently the only route that does it.

How the Volatility Discount Works

Lenders on those programs do not use the full market value of a volatile asset. They apply a discount, commonly in the 30 to 50 percent range, then spread the discounted balance across the loan term. A portfolio worth $1 million might be counted at $500,000 to $700,000 before the monthly figure is calculated.

Expect to document ownership on a U.S.-regulated exchange, provide statements showing transaction history and current balance, and show a clear trail for any funds that moved from the exchange to your bank. Some lenders also ask for a 1099-B or 1099-MISC from the exchange alongside your tax returns.

Because every lender sets its own discount, the only number that matters is the one your lender runs. We can model your qualifying income from your actual holdings before you apply.

Agency guidelines described here are current as of September 2026 and are subject to change.

Asset Based Mortgage Programs for Crypto Holders

An asset based mortgage is the product behind all of this. Instead of qualifying primarily on employment income, you qualify on the strength of your total asset picture. On a non-QM program, that picture can include digital assets. We work with non-QM programs built specifically for borrowers whose wealth sits in brokerage accounts, retirement funds, or digital assets rather than a steady paycheck.

That includes:

• Retirees and early retirees living off investment portfolios
• Founders and self-employed borrowers with limited traditional documentation
• Long-term crypto holders who don’t want to sell to qualify
• W-2 borrowers who want their crypto to boost their loan amount

If you’re comparing this route against a standard cash out refinance in Texas, the biggest difference is documentation. As asset-based files trade tax returns for verified account statements and exchange records.

Texas Cash Out Refinance Rules: 80% LTV Cap and the 12-Day Waiting Period

Texas treats home equity differently than almost every other state, and these Texas cash out refinance rules apply whether your qualifying assets are crypto, stocks, or ordinary income.

If you would rather not touch your first lien, a home equity loan or HELOC follows a different set of Texas limits. For example, on a $500,000 home, your maximum new loan is $400,000. If your current balance is $300,000, you’d have roughly $100,000 available before closing costs.

Texas Cash Out Refinance Guidelines You Should Know Before Applying

• FHA and VA cash-out refinances are not permitted in Texas on a homestead; this is a state-level restriction under Section 50(a)(6).
• The new loan must become the only lien on the property in most cases.
• Manufactured homes are typically capped at a lower 65% LTV rather than 80%.
• Investment properties and second homes fall outside these restrictions entirely and follow standard conventional guidelines instead.

Cash Out Refinance Tax Implications When Crypto Is Involved

This is the part crypto holders tend to overlook. Under the FHFA directive, lenders can count your holdings without requiring you to liquidate them into U.S. dollars prior to a loan closing. Which is exactly what keeps you out of a taxable event. If you sell crypto to fund a down payment or closing costs instead of using it as a qualifying asset. That sale is a taxable capital gain, short-term or long-term depending on how long you’ve held it.

A few things worth confirming with your tax advisor before you refinance:

• Whether any crypto you convert to cash for reserves counts as a taxable sale in that tax year
• How the sale affects your total taxable income for the year, which can also affect debt-to-income calculations
• Whether you’re better off using crypto as a qualifying asset rather than converting it, to avoid an unnecessary capital gains event entirely.

How to Apply, Step by Step

1. Get your exchange documentation in order. Statements showing ownership, transaction history, and current balance from a U.S.-regulated exchange.
2. Get a home valuation. Your lender will need a current appraisal to calculate your 80% LTV ceiling.
3. Submit your application and asset documentation together. Include crypto statements alongside any traditional income documents you have.
4. Underwriting applies the asset depletion discount. Your crypto and other eligible assets are converted into a qualifying income figure.
5. Receive your required disclosures. Texas law requires these at least 12 days before closing.
6. Close on your new loan. Your existing mortgage is paid off, and any cash-out proceeds are disbursed to you after the required waiting periods.

Frequently Asked Questions

1. Can you use crypto gains as income to qualify for a cash-out refinance?

Yes, in most cases through an asset depletion loan rather than as direct income. Your verified holdings are discounted for volatility, often by 30 to 50 percent, then divided over a set number of months to produce a qualifying monthly figure. Most borrowers may qualify without selling a single coin.

2. Does crypto count as mortgage reserves?

Only after it is converted. Fannie Mae accepts virtual currency exchanged into U.S. dollars for reserves, closing costs and down payment, provided the funds sit in a U.S. or state regulated institution and are verified in dollars before closing. Freddie Mac requires the same conversion. Holding it on an exchange is not enough today.

3. Do you have to sell your crypto to qualify for a refinance?

On a conforming loan, yes, as of September 2026. Both agencies still require conversion to U.S. dollars before closing, and Freddie excludes crypto from asset depletion entirely. Non-QM and portfolio lenders can count holdings without a sale, which is why most crypto borrowers use those programs instead.

4. How long does crypto need to be seasoned before closing?

There is no crypto-specific seasoning period in either agency guide. What lenders need is a documented trail from the exchange to your bank account, plus the standard two months of statements.  On a refinance, Fannie Mae does not require large deposits to be sourced at all, which removes the usual reason borrowers wait 60 days.

5. How much cash can you take out in a Texas cash-out refinance?

Texas caps a homestead cash-out at 80 percent loan-to-value under Section 50(a)(6). On a $500,000 home, the maximum new loan across all liens is $400,000. If you owe $300,000, roughly $100,000 is available before closing costs. Manufactured homes are typically capped lower, around 65 percent.

6. Is a crypto cash-out refinance in Texas different from a regular one?

The Texas rules are identical: 80 percent LTV cap, 12-day disclosure period, 2 percent lender fee cap, homestead only, and one cash-out every 12 months. Only the documentation changes. You add exchange statements, proof of ownership, and source-of-funds records to a standard refinance file.

7. Does a cash-out refinance trigger capital gains tax on crypto?

The refinance itself does not. Cash-out proceeds are loan proceeds, not income. Tax only applies if you sell crypto to fund reserves or closing costs, which is a capital gain taxed as short or long term depending on your holding period. Confirm the treatment with your tax advisor.

Why Crypto Holders Choose Dream Home Mortgage in Texas

Not every lender has caught up with how crypto assets should be documented, discounted, and verified. And Texas’s Section 50(a)(6) rules add another layer that trips up lenders unfamiliar with homestead lending. We combine both: a team that understands asset depletion and asset-based underwriting for digital asset holders and deep, day-to-day experience with Texas’s 80% LTV cap, 12-day disclosure timeline, and fee restrictions.

That combination matters, because a single missed step under Section 50(a)(6) can delay or even void a closing. We walk you through exactly what documentation your crypto holdings need, model your qualifying income before you apply, and keep your file compliant with every Texas-specific rule along the way.

Every crypto holder’s portfolio, tax situation, and Texas homestead equity picture looks different. And the fastest way to know what you actually qualify for is to talk it through with our team as they deal with such loans regularly. We’ll look at your specific exchange, your holding period, and how much of your portfolio a lender would actually count before you make any moves. 

You can book a free consultation with our team, and we’ll walk through your crypto holdings, your equity position, and the Texas rules that apply to you before you move a single coin.