Dubbed the 21st Century Mortgage Act, the bill aims to codify a June directive from the Federal Housing Finance Agency (FHFA), which instructed government-backed mortgage giants Fannie Mae and Freddie Mac to consider certain crypto assets during single-family loan evaluations.
If passed, the law would make it easier for Americans, especially younger, crypto-savvy applicants, to use their Bitcoin, Ether, or other digital holdings as part of their mortgage creditworthiness. While some see it as an overdue modernization of lending standards, others in the Senate are voicing concern over the risks of introducing crypto’s volatility into the housing finance system.
Crypto and Mortgages: A Legislative First
According to Senator Lummis’ announcement on Tuesday, the proposed bill builds on the FHFA’s June 2025 directive and seeks to formally empower mortgage lenders to evaluate crypto assets as collateral or part of a borrower’s net worth.
Lummis cited U.S. Census Bureau data showing that only 36% of Americans under 35 own homes as of Q1 2025. The bill aims to help this group leverage their digital wealth for long-term stability without being forced to liquidate it into fiat.
The FHFA’s June Order: A Regulatory Turning Point
The FHFA’s June order took many in the housing finance sector by surprise. By directing Fannie Mae and Freddie Mac to evaluate crypto as part of loan risk assessments, it opened the door to non-traditional asset inclusion in federally backed mortgage programs.
While this guidance isn’t binding law, Lummis’s bill seeks to change that by enshrining it into the U.S. legal framework.
At the time, FHFA Director William Pulte stated that the goal was to “evaluate how evolving asset classes affect long-term borrower stability and risk modeling.” But not everyone was convinced.
Pushback from Senate Democrats
Several Democratic Senators have since pushed back against the FHFA order and Lummis’ proposed legislation. In a letter dated July 24, they warned of the volatility and liquidity risks associated with using crypto assets for mortgages.
This debate underscores a broader ideological divide in Congress: while Republicans largely view crypto as a vehicle for financial empowerment, many Democrats remain cautious, emphasizing consumer protection and systemic risk.
A Broader Policy Shift: Multiple Crypto Bills in Play
The 21st Century Mortgage Act is just one of several crypto-focused bills that may be considered when the Senate reconvenes after its August recess.
Senator Lummis is promoting a separate bill to develop a digital asset market structure to clarify agency jurisdiction between the SEC and CFTC. The House has also moved a bill that would prevent the Federal Reserve from issuing a central bank digital currency (CBDC).
Meanwhile, Representative Nancy Mace introduced a similar mortgage bill in the House on July 14. Her proposal, the American Homeowner Crypto Modernization Act, would mandate that lenders “consider the value of digital assets in brokerage accounts associated with crypto exchanges” during the mortgage approval process.
Industry Experiments: Bitcoin-Backed Mortgages Already Emerging
While U.S. policy moves slowly, private innovation is moving quickly. In Australia, a fintech company called Block Earner recently announced its intention to roll out Bitcoin-backed mortgage loans following a court ruling that its crypto lending services did not qualify as regulated financial products.
The company’s model would allow borrowers to retain crypto exposure while accessing fiat-based housing loans, offering a template that U.S. lenders could potentially follow, pending regulatory clarity.
“The world is moving toward hybrid finance models, and it’s only logical that crypto finds its place in mortgage portfolios,” said Marcus Glenwood, CEO of FinDex, a U.S.-based crypto-fintech advisor.
A Boon for Young Investors?
For many Americans under 40, crypto assets form a meaningful portion of their wealth. In a recent survey from BlockSurvey, over 32% of Gen Z and Millennials reported owning more crypto than stocks.
Lummis’ bill is clearly targeted at this demographic, who often struggle to meet mortgage requirements due to low credit scores or lack of traditional savings but may have accumulated significant value in digital assets like ETH or BTC.
By allowing borrowers to list crypto as collateral or a factor in net worth assessment, without having to liquidate it, the law could ease barriers to homeownership.
This trend also aligns with broader crypto retirement and real estate modernization policies being floated in the 2024–2025 political cycle. Read more on Trump-era crypto policy proposals here.
What Comes Next?
The Senate is set to adjourn for a month-long August recess, pushing any formal discussion on the bill to September or later. But analysts believe the proposal is a preview of crypto’s growing role in U.S. policy debates, particularly as digital assets become more entrenched in everyday financial planning.
Significantly, if enacted, the bill could represent a fundamental paradigm shift in American mortgage lenders’ attitudes to wealth and risk and reshape eligibility standards for millions of crypto-first borrowers.
Final Thoughts
Senator Lummis’ mortgage bill may face hurdles, but its introduction is symbolic of how far crypto has come in just a few years. From fringe investment to potential mortgage collateral, digital assets are now part of serious economic and legislative conversations.
While the conversation around volatility and systemic risk continues to evolve, the increasing presence of crypto in housing and retirement cannot be ignored. Whether the 21st Century Mortgage Act passes as is or is adapted, it has already sparked a conversation about what constitutes financial eligibility in the 21st century.
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