Senator Lummis Drives US Crypto Home Loan Bill
On a few days ago we shared a story on Australia now accepting Bitcoin for home loan collateral and now U.S. Senate is considering new legislation that would allow digital assets like Bitcoin and Ethereum to be recognized in the mortgage approval process. led by a Wyoming Senator Cynthia Lummis, the proposed 21st Century Mortgage Act aims to codify a recent directive by the Federal Housing Finance Agency (FHFA), which instructed mortgage giants Fannie Mae and Freddie Mac to factor Cryptocurrency into risk assessments for single family home loans.
This could change how American homebuyers could leverage their crypto portfolios to access home loans, reflecting the growing role digital assets play in modern wealth accumulation especially among younger generations.
A Ground breaking Proposal for a New Generation of Homebuyers
Senator Lummis, long known for her pro crypto stance who introduced the legislation to provide a legal framework that supports the FHFA’s June order. The agency, which oversees both Fannie Mae and Freddie Mac, directed the two government backed lenders to prepare frameworks for considering digital assets as part of mortgage applications. The order allows borrowers to use their cryptocurrency as collateral without converting it to fiat which reduces the potential tax and market impact of such conversions.
“This legislation embraces an innovative path to wealth building keeping in mind the growing number of young Americans who possess digital assets,” Lummis said in a statement. Citing data from the U.S. Census Bureau, she noted that homeownership for Americans under 35 remains low around 36% partially due to barriers in meeting traditional asset requirements for mortgage approval.
U.S Senate Debates Bill and Offerings
While the bill has generated excitement among the community especially younger homebuyers, it has also drawn criticism. Senate Democrats expressed strong reservations in a letter to FHFA Director William Pulte, urging a more cautious approach. They warned that crypto’s notorious volatility and liquidity issues could pose substantial risks to the housing market.
“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,” the letter stated. These concerns highlight the ongoing debate about how best to integrate crypto into traditional financial systems without introducing systemic risk.
U.S House Of Representatives Drives Similar Reform
In the House of Representatives, Republican Nancy Mace has introduced a similar bill the American Homeowner Crypto Modernization Act. Her proposal requires mortgage lenders to consider the value of digital assets held in brokerage accounts associated with crypto exchanges during the mortgage credit evaluation process.
Together, these legislative efforts reflect a growing bipartisan interest in modernizing the mortgage industry to reflect changing financial realities. Both bills come as part of a broader push to define crypto regulation in the U.S., including ongoing discussions about banning a central bank digital currency (CBDC) and structuring digital asset markets.
So it looks like there is growth for the Crypto Sector just yet!
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