U.S. Senate Bill Proposes Including Cryptocurrency in Mortgage Approval Process

2 months ago

KEY FACTS: Wyoming Senator Cynthia Lummis has introduced the 21st Century Mortgage Act, a bill that would codify a June FHFA directive requiring Fannie Mae and Freddie Mac to consider cryptocurrency holdings as assets in single-family mortgage applications. Aimed at modernizing the U.S. housing finance system, the legislation seeks to enable young Americans, who increasingly own digital assets like Bitcoin, to use these holdings as collateral without converting them to fiat currency, addressing the low 36% homeownership rate among those under 35.

Source: Senator Lummis Bill/ PDF

U.S. Senate Bill Proposes Including Cryptocurrency in Mortgage Approval Process

Wyoming Senator Cynthia Lummis has introduced the 21st Century Mortgage Act, a proposed legislation that could reshape how Americans leverage digital assets to secure home loans. The bill, unveiled on July 29, aims to codify a June order from the U.S. Federal Housing Finance Agency (FHFA) requiring government-backed mortgage giants Fannie Mae and Freddie Mac to consider cryptocurrency holdings as assets in single-family loan applications. This legislative push, which follows a similar proposal by Representative Nancy Mace in the House, shows a growing recognition of digital assets as a legitimate component of personal wealth, particularly among younger Americans struggling to achieve homeownership.

The 21st Century Mortgage Act comes at a time when cryptocurrency ownership is on the rise, particularly among younger generations. Senator Lummis, a vocal advocate for digital assets and a self-proclaimed “Crypto Queen” on Capitol Hill, framed the bill as a forward-thinking solution to address the challenges faced by young Americans in the housing market. Citing U.S. Census Bureau data, Lummis noted that homeownership among U.S. residents under the age of 35 stood at approximately 36% in the first quarter of 2025, a figure that underscores the difficulties young people face in securing affordable long-term housing. Lummis said this in a Tuesday notice announcing the bill:

“This legislation embraces an innovative path to wealth-building, keeping in mind the growing number of young Americans who possess digital assets...”

The proposed law seeks to provide flexibility for a generation increasingly invested in digital currencies like Bitcoin and Ethereum by allowing borrowers to use cryptocurrency holdings as collateral without converting them to fiat currency. This approach, Lummis argues, aligns with the realities of a digital age where traditional financial systems must evolve to accommodate new forms of wealth.

The bill builds on a June directive from FHFA Director William Pulte, who instructed Fannie Mae and Freddie Mac to explore frameworks for incorporating digital assets into mortgage underwriting processes. Lummis’s legislation would enshrine this directive into law, ensuring that mortgage lenders recognize assets recorded on cryptographically secured ledgers as part of a borrower’s financial profile. This move could mark a significant milestone in legitimizing cryptocurrencies within mainstream financial systems, potentially reshaping how Americans finance major purchases like homes.

The 21st Century Mortgage Act is one of three crypto-related bills under consideration in the U.S. Senate as it prepares for a month-long recess in August. In addition to the mortgage legislation, Senator Lummis is a lead Republican sponsor of a bill aimed at establishing a comprehensive digital asset market structure. This proposed framework seeks to provide regulatory clarity for cryptocurrencies, addressing long-standing concerns about oversight and consumer protection in the rapidly evolving crypto industry. Another bill, which passed the House of Representatives in July, aims to prohibit the Federal Reserve from launching a central bank digital currency (CBDC), reflecting ongoing debates about the role of digital currencies in the U.S. financial system.

Lummis’s advocacy for cryptocurrency is not new. A Wyoming native with a background in ranching, law, and public service, she has emerged as one of the most prominent pro-crypto voices in Congress. Her efforts extend beyond the mortgage bill, as she has championed initiatives like the BITCOIN Act, which proposes the creation of a U.S. Strategic Bitcoin Reserve by acquiring 1 million BTC over five years. Lummis, who disclosed owning over $100,000 in Bitcoin, has positioned herself as a staunch supporter of integrating digital assets into the national financial strategy, viewing them as a hedge against inflation and a tool for economic innovation.

Her work on crypto legislation has often been bipartisan, notably through her collaboration with New York Senator Kirsten Gillibrand. Together, they have co-sponsored bills like the Responsible Financial Innovation Act, which seeks to establish a regulatory framework for digital assets, classifying Bitcoin and Ethereum as commodities under the Commodity Futures Trading Commission (CFTC) while treating most altcoins as securities under the Securities and Exchange Commission (SEC). This partnership underscores Lummis’s ability to bridge partisan divides in pursuit of sensible crypto regulation.

If passed, the 21st Century Mortgage Act could pave the way for wider acceptance of cryptocurrency-backed financial products in the U.S. housing market. The bill’s provision to prohibit lenders from forcing borrowers to convert digital assets into fiat currency is particularly significant, as it preserves the value of crypto investments for homebuyers. This could encourage greater adoption of cryptocurrencies, particularly Bitcoin.

Meanwhile, in Australia, fintech company Block Earner is preparing to launch Bitcoin-backed home loans, following a court ruling that such products do not fall under the country’s financial product regulations. These developments suggest a growing acceptance of cryptocurrencies as legitimate assets for major financial transactions, a trend that Lummis’s bill seeks to advance in the U.S.

The bill’s success will depend on its ability to garner bipartisan support and address concerns about financial stability. Lummis’s leadership on the Senate Banking Committee’s digital assets subcommittee positions her well to navigate these challenges, but opposition from key Democrats could complicate its passage. As the Senate prepares to consider the bill alongside other crypto-related legislation, the outcome will have significant implications for the future of digital assets in the U.S. financial system.

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