Senator Lummis’s 21st Century Mortgage Act: Digital Assets for US Home Loans

A significant legislative initiative is underway to redefine how digital assets are recognized within the U.S. housing finance system. Senator Cynthia Lummis has introduced the “21st Century Mortgage Act,” a groundbreaking bill designed to modernize federal mortgage eligibility criteria by explicitly incorporating cryptocurrencies and other digital assets. This move aims to align traditional lending practices with the evolving financial landscape, particularly benefiting younger demographics increasingly invested in the digital economy.

• Senator Cynthia Lummis introduced the “21st Century Mortgage Act.”
• The bill aims to allow digital assets, including cryptocurrencies, to be directly considered for federal mortgage eligibility.
• It mandates Fannie Mae and Freddie Mac to recognize cryptographically recorded assets as part of a borrower’s financial profile.
• A key objective is to eliminate the requirement for borrowers to convert digital assets into U.S. dollars before their value is assessed.
• The initiative responds to declining homeownership among younger Americans who are increasingly investing in digital assets.

Key Provisions of the 21st Century Mortgage Act

Introduced on July 29, the proposed legislation directly targets the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. It mandates these entities to acknowledge cryptographically recorded assets—including various cryptocurrencies—as legitimate components of a borrower’s financial profile for mortgage eligibility. This represents a significant departure from current industry practices, where mortgage applicants holding substantial digital assets are frequently required to convert them into U.S. dollars before their value can be considered by lenders. Senator Lummis’s bill seeks to abolish this conversion requirement, advocating for equitable treatment of digital savings within the U.S. housing finance ecosystem.

Addressing Evolving Financial Landscapes and Youth Homeownership

Senator Lummis positions her legislative proposal as a crucial response to the persistent decline in homeownership rates among young Americans, a demographic increasingly engaged with digital asset investments. She stressed the importance for federal agencies to adapt to contemporary wealth-building models rather than inadvertently impede financial innovation. To underscore her argument, Senator Lummis cited data from the U.S. Census Bureau, which indicated that homeownership among Americans under 35 stood at only 36.6% in the first quarter of 2025. Complementing this, recent studies reveal that 21% of U.S. adults hold crypto assets, with two-thirds of this demographic under the age of 45. These statistics collectively highlight the growing imperative for mortgage lending standards to evolve and accurately reflect modern forms of wealth accumulation.

Potential Impact and Broader Implications

Should the “21st Century Mortgage Act” successfully navigate the legislative process and be enacted, it would mark a significant stride towards integrating digital assets into the broader traditional financial services sector. This legislative milestone could establish a crucial federal precedent for formally recognizing digital wealth within established regulatory frameworks. Such recognition would potentially pave the way for wider acceptance, increased utility, and more extensive integration of cryptocurrencies and other digital assets across diverse segments of the U.S. economy, fostering a more inclusive financial future.