US Senate Bill Proposes Including Cryptocurrency in Mortgage Approval Process

Wyoming Senator Cynthia Lummis has introduced legislation aimed at codifying a June order from the US Federal Housing Finance Agency (FHFA) that requires mortgage purchasers to consider digital assets in mortgage applications. In a statement on Tuesday, Lummis announced her proposed bill, the 21st Century Mortgage Act, which would take congressional action following the FHFA's directive. The June order mandates that US mortgage purchasers Fannie Mae and Freddie Mac "consider cryptocurrency as an asset for single-family loans."

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

However, several Senate Democrats have expressed concerns about the FHFA order. They have called on FHFA Director William Pulte to thoroughly evaluate the potential risks and benefits of including crypto assets in mortgage applications, as well as the broader impact on the housing market and financial system. In a letter dated July 24, Democrats noted:

"To the extent that historical volatility and liquidity persists even as the market matures, a borrower using crypto faces an increased risk that they may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default."

Lummis’ bill specifically targets young Americans struggling to secure affordable long-term housing. The legislation would allow these individuals to have their digital assets assessed as collateral without forcing them to convert crypto holdings into fiat currency. She cited US Census Bureau data indicating that homeownership among Americans under 35 was approximately 36% as of Q1 2025.

Senate Crypto Legislation Ahead of August Recess

The crypto mortgage bill is one of three crypto-related bills the US Senate may consider after its upcoming month-long recess. Besides the mortgage legislation, Lummis is a leading Republican sponsor of a bill to establish a digital asset market structure in the Senate. Another bill under consideration aims to prevent the Federal Reserve from launching a central bank digital currency (CBDC), following its passage in the House of Representatives in July. Meanwhile, the House of Representatives, currently in recess, has a similar crypto mortgage proposal introduced by Republican Representative Nancy Mace. The American Homeowner Crypto Modernization Act, introduced on July 14, would require mortgage lenders to consider the value of any digital assets a borrower holds in brokerage accounts linked to cryptocurrency exchanges during credit evaluations.

Global Developments: Bitcoin-Backed Mortgages in Australia

In July, Australia-based company Block Earner announced plans to roll out Bitcoin-backed mortgages, offering a similar pathway for crypto users to retain their assets while securing home loans. This announcement followed a Federal Court of Australia ruling that Block Earner’s crypto lending products do not qualify as financial products under the country’s Corporations Act.

Source: Cointelegraph

Frequently Asked Questions (FAQ)

Legislative and Regulatory Aspects

Q: What is the main purpose of the 21st Century Mortgage Act? A: The 21st Century Mortgage Act, introduced by Senator Cynthia Lummis, aims to legally recognize and include cryptocurrency as an asset that can be considered in mortgage applications. Q: What concerns have Senate Democrats raised regarding this legislation? A: Senate Democrats have expressed concerns about the potential risks associated with including crypto assets in mortgage applications, particularly the volatility and liquidity of digital assets, which could impact a borrower's ability to manage mortgage default risks. Q: What is the FHFA order that Senator Lummis' bill aims to codify? A: The FHFA order, issued in June, directs mortgage purchasers like Fannie Mae and Freddie Mac to consider cryptocurrency as a valid asset for single-family home loans. Q: Are there similar legislative efforts in the House of Representatives? A: Yes, Representative Nancy Mace has introduced the "American Homeowner Crypto Modernization Act," which also proposes that mortgage lenders consider a borrower's digital assets during credit evaluations. Q: What are the potential benefits of this legislation, according to its supporters? A: Supporters, like Senator Lummis, believe the legislation can provide an innovative path to wealth-building for young Americans who hold digital assets, allowing them to leverage these assets for homeownership without immediate conversion to fiat currency.

Global Crypto Mortgage Trends

Q: Are there other countries exploring crypto-backed mortgages? A: Yes, Australia has seen companies like Block Earner announcing plans for Bitcoin-backed mortgages, indicating a global trend towards integrating digital assets into traditional financial products like home loans.

Crypto Market AI's Take

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US Senate bill seeks to include crypto in mortgage approval process