Crypto Mortgages: A New Era for Homebuyers?
In a move that could revolutionize the way we think about mortgages, Wyoming Senator Cynthia Lummis has introduced a bill that would allow mortgage buyers to consider digital assets, such as cryptocurrency, when evaluating loan applications. This proposed legislation, dubbed the “Mortgage Reform Act of the 21st Century,” aims to acknowledge the growing number of young Americans who have invested in digital assets and provide them with more flexible options for securing a home loan.
Background and Context
The bill comes on the heels of a June order from the US Federal Housing Finance Agency (FHFA), which instructed mortgage buyers Fannie Mae and Freddie Mac to consider cryptocurrency as an asset for single-family loans. Lummis’ proposal takes this a step further, providing a framework for how these digital assets can be evaluated and used as collateral. This is significant, as it could provide a much-needed boost to the housing market, particularly for young Americans who are struggling to find affordable long-term housing options.
Concerns and Criticisms
Not everyone is convinced that this is a good idea, however. Several Senate Democrats have expressed concerns about the potential risks of incorporating cryptocurrency into mortgage applications, citing the historical volatility and liquidity issues associated with digital assets. In a letter to FHFA Director William Pulte, they warned that borrowers who are exposed to crypto may be at increased risk of mortgage failure, as they may not be able to liquidate their assets quickly enough to meet their loan obligations.
The Bigger Picture
The proposed legislation is part of a broader effort to modernize the US mortgage system and provide more opportunities for homebuyers. According to data from the US Census Bureau, homeownership rates among Americans under the age of 35 have declined significantly in recent years, with only about 36% of residents in this age group owning their own homes in the first quarter of 2025. By allowing digital assets to be used as collateral, Lummis’ bill could help to address this issue and provide more young Americans with access to affordable housing.
What’s Next?
The Senate is set to go on break in August, but the Crypto Mortgage Bill is one of several pieces of legislation that will be considered when they return. In addition to Lummis’ proposal, there are several other bills in the works that aim to regulate digital assets and provide more clarity on their use in various contexts. One of these, the American Homeowner Crypto Modernization Act, was introduced by Republican Representative Nancy Mace in July and would require mortgage lenders to consider the value of digital assets held in brokerage accounts or cryptocurrency exchanges when evaluating loan applications.
Global Implications
The idea of using cryptocurrency as collateral for mortgages is not unique to the US. In Australia, a company called Block Sorner has announced plans to offer Bitcoin mortgages, which would allow crypto users to keep their assets while still accessing the funds they need to purchase a home. This development comes after a federal court in Australia ruled that the company’s crypto credit products were not considered financial products under the country’s corporations laws.
