U.S. Senator Cynthia Lummis (R-WY) introduced the 21st Century Mortgage Act, legislation requiring government-sponsored enterprises Fannie Mae and Freddie Mac to accept borrowers' cryptocurrency holdings as mortgage collateral without mandatory conversion to U.S. dollars. The bill explicitly permits digital assets 'evidenced and maintained pursuant to a qualified custodial arrangement' to be included in borrower reserves.
This move codifies a July 2025 directive by Federal Housing Finance Agency (FHFA) Director William Pulte, who instructed Fannie Mae and Freddie Mac to develop proposals for incorporating crypto into mortgage underwriting. Senator Lummis emphasized that the legislation targets wealth-building for younger Americans holding digital assets, stating: 'This legislation embraces an innovative path to wealth-building, keeping in mind the growing number of young Americans who possess digital assets... Government agencies must evolve to meet the needs of a modern, forward-thinking generation.'
However, the bill faces opposition from Senate Banking Committee Democrats led by Senator Elizabeth Warren. Warren and colleagues including Bernie Sanders and Chris Van Hollen sent a letter to FHFA warning that volatile crypto assets 'could pose risks to the stability of the housing market and the financial system.' Passage remains uncertain as Lummis simultaneously works on broader crypto market regulation.