TLDR
- Wyoming Senator Cynthia Lummis introduced the 21st Century Mortgage Act to let borrowers use crypto holdings for mortgage applications without converting to cash
- The bill supports a June order from the Federal Housing Finance Agency directing Fannie Mae and Freddie Mac to consider crypto assets for loan approvals
- Democratic senators including Elizabeth Warren oppose the plan, warning about risks from volatile digital assets in the housing market
- Only 36% of Americans under 35 own homes as of Q1 2025, making this potentially important for young crypto holders
- Similar legislation was introduced in the House by Representative Nancy Mace in July
Wyoming Senator Cynthia Lummis has introduced new legislation that would allow Americans to use their cryptocurrency holdings when applying for mortgages. The bill aims to help young homebuyers who own digital assets but struggle with traditional mortgage approval processes.
The 21st Century Mortgage Act would codify a June order from the Federal Housing Finance Agency (FHFA). That order directed government-backed mortgage giants Fannie Mae and Freddie Mac to develop proposals for including crypto holdings in mortgage underwriting.
Under the proposed law, borrowers could include their digital assets as reserves without converting them to US dollars first. The assets would need to be held in qualified custodial arrangements to qualify for mortgage consideration.
Lummis said the legislation targets young Americans who possess digital assets but face barriers to homeownership. US Census Bureau data shows only 36% of Americans under age 35 owned homes in the first quarter of 2025.
“This legislation embraces an innovative path to wealth-building, keeping in mind the growing number of young Americans who possess digital assets,” Lummis stated. She argued that government agencies must evolve to meet the needs of modern generations rather than punishing innovation.
Democratic Opposition Emerges
Several Democratic senators have pushed back against the FHFA’s crypto mortgage initiative. Senator Elizabeth Warren, the ranking Democrat on the Banking Committee, sent a letter questioning the use of volatile digital assets in mortgage lending.
The letter, also signed by Senators Bernie Sanders, Chris Van Hollen, Jeff Merkley and Mazie Hirono, warned the move “could pose risks to the stability of the housing market and the financial system.” The Democrats called on FHFA Director William Pulte to fully assess potential risks and benefits before implementation.
They expressed concern about cryptocurrency’s historical volatility and liquidity issues. The senators argued that borrowers using crypto face increased risk of being unable to convert their holdings to cash when needed to prevent mortgage default.
Congressional Timeline and Related Bills
The crypto mortgage bill is one of three cryptocurrency measures the Senate may consider after returning from August recess. Lummis is also working on broader digital asset market structure legislation as chair of the Banking Committee’s digital assets subcommittee.
A separate bill aimed at blocking the Federal Reserve from launching a central bank digital currency is also under Senate consideration. That measure already passed the House of Representatives in July.
The House has similar crypto mortgage legislation from Republican Representative Nancy Mace. Her American Homeowner Crypto Modernization Act, introduced July 14, would require lenders to consider digital assets held in brokerage accounts linked to cryptocurrency exchanges.
The House version specifically targets assets “in any brokerage account associated with a cryptocurrency exchange” during the mortgage credit evaluation process. Both bills face uncertain prospects as Congress prepares for the August recess period.
FHFA Director Pulte’s June directive to Fannie Mae and Freddie Mac requires the agencies to submit detailed proposals on crypto inclusion in mortgage underwriting.
