Senate Bill Could Transform Mortgage Lending by Recognizing Crypto Assets

The 21st Century Mortgage Act, sponsored by Senator Cynthia Lummis (R-Wyoming), would require government-sponsored enterprises like Fannie Mae and Freddie Mac to factor digital assets into mortgage risk evaluations — a significant shift from current practice. (Senator Cynthia Lummis)

Bringing Mortgages Into the Digital Era

Under present rules, digital currencies such as Bitcoin or Ethereum must first be converted into U.S. dollars before they count toward a borrower’s financial picture. If this bill becomes law, that requirement would be eliminated — enabling digital assets held on secure, blockchain-based ledgers to contribute directly to a borrower’s mortgage qualification. (Senator Cynthia Lummis)

Senator Lummis argues this change would reflect how many Americans, especially younger generations, are building wealth today. According to recent data, roughly 21% of U.S. adults own some form of cryptocurrency, and two-thirds of those owners are under the age of 45 — a demographic that has struggled to enter the housing market at higher rates than previous generations. (Senator Cynthia Lummis)

Lummis emphasized that the legislation is meant to help bring the mortgage system into the 21st century by acknowledging the increasing role digital assets play in personal finances. (Senator Cynthia Lummis)

Following Regulatory Momentum

The bill builds on a directive from Federal Housing Finance Agency (FHFA) Director Bill Pulte, who earlier this year ordered Fannie Mae and Freddie Mac to explore how digital currencies could be incorporated into their risk models. That move signaled growing federal interest in blending traditional finance with cryptocurrency assets. (Scotsman Guide)

If adopted, the law would amend existing mortgage underwriting standards to formally include digital assets recorded on cryptographically secured distributed ledgers as recognized economic resources — provided they meet criteria set for reliability and documentation. (Congress)

Support and Skepticism From Lawmakers

While many industry observers see the bill as a step toward broader financial inclusion, not all lawmakers are convinced. Senator Jeff Merkley (D-Oregon), along with several colleagues, has voiced strong reservations about the proposal.

Merkley cautioned that integrating highly volatile assets like cryptocurrencies into mortgage evaluations might introduce new risks to the housing market, drawing parallels to the lax lending practices that contributed to the 2008 financial crisis. He also highlighted concerns about liquidity, theft, and cyber-related losses tied to digital assets. (Scotsman Guide)

In a formal letter to the FHFA, Merkley and other senators asked for detailed justification and risk analysis behind the FHFA’s initial push to include crypto in underwriting, underscoring the broader debate over how — or even whether — digital assets should intersect with traditional financial systems. (Scotsman Guide)

What This Could Mean for Home Buyers

If enacted, the bill could open new opportunities for prospective homeowners who hold cryptocurrency but lack large traditional cash reserves. By recognizing digital assets directly in mortgage applications, lenders might be better able to assess a borrower’s overall financial strength, potentially increasing access to homeownership for crypto holders.

At the same time, it would mark a notable instance of mainstream legislation adapting to the realities of digital finance — a trend likely to shape future discussions around banking, lending, and personal wealth in the digital age.