A new bill wants to reward cryptocurrency investors when it comes to homebuying, potentially making owning a single-family home more accessible to more people, but a former White House adviser warns about the slippery slope the proposal presents for the broader economy.
Homebuyers will be able to count cryptocurrency investments as part of their wealth when applying for a mortgage if the 21st Century Mortgage Act filed by Sen. Cynthia Lummis, a Republican from Wyoming, passes. That is because the legislation would require government-sponsored entities, or GSEs Fannie Mae, Freddie Mac and Ginnie Mae, to consider the digital currency as an asset.
GSEs buy mortgages from banks, bundle them and sell them as securities to investors. This process encourages lenders to approve more mortgages. Adding cryptocurrency to the asset list may help more buyers gain approval and pave a path toward normalizing digital assets in the mortgage lending space.
In a release, Lummis said 21% of American adults own cryptocurrency, with 67% under the age of 45, citing the Harris Poll survey, "2025 State of the Crypto Holders Report," released in July. “The American dream of homeownership is not a reality for many young people,” Lummis said in a statement. This legislation embraces an innovative path to wealth-building, keeping in mind the growing number of young Americans who possess digital assets."
University of Minnesota Law School professor Richard Painter, who sat on George W. Bush's White House Counsel from 2005 to mid-2007, was skeptical of the proposed legislation.
"It’s going to encourage average people to get into crypto," he said. "It’s sending the message crypto is as good of an investment as money market bonds. It’s sending the message crypto is as good as liquid assets. Is this going to affect riskiness of mortgages? No."
Instead, the risk comes with financial institutions and average consumers banking on a loosely regulated asset, Painter said.
"What I'm worried about is the 2008 crisis repeating itself with cryptocurrency becoming the new derivative that was not being regulated," Painter said. "Here’s the problem: Crypto is not like any investment, because it’s not regulated like a bank deposit."
Lummis did not immediately respond to a request to comment.
The bill follows a conversation spanning months in Washington, D.C. Federal Housing Finance Agency Director Bill Pulte directed Fannie and Freddie, both under the supervision of his agency, to consider digital assets in the mortgage space in June. In July, the U.S. Senate Committee on Banking, Housing and Urban Affairs met to discuss digital money in real estate with expert witnesses weighing in from cryptocurrency firms and academia.
"Proceed very carefully with cryptocurrency," Painter said. "If you think it’s an investment, Congress is saying they're not willing to regulate it like most investments."
Time will tell whether the bill will become legislation. It needs to go through a Senate committee meeting, pass the full Senate and follow the same process in the House of Representatives. The bill has yet to land on any committee agenda.
So far, housing dominates many discussions on Capitol Hill. The Senate Banking Committee blessed the Renewing Opportunity in the American Dream to Housing Act last week. It contains 40 housing-related initiatives meant to ease financial burdens for owners, renters and buyers, and boost supply for municipalities.
