Senator Cynthia Lummis, a strong advocate for the digital assets industry, has proposed a new bill that would enable mortgage borrowers to leverage their cryptocurrency holdings as a means of securing loans. This development follows a directive from Federal Housing Finance Agency Director William Pulte, instructing government-backed mortgage entities Fannie Mae and Freddie Mac to develop proposals for incorporating crypto holdings into mortgage underwriting.
Lummis' bill seeks to formalize this approach by allowing borrowers' digital asset holdings, maintained through qualified custodial arrangements, to be considered part of their reserves without requiring conversion to US dollars. According to Lummis, this legislation promotes an innovative approach to building wealth, particularly among young Americans who hold digital assets, potentially bridging the gap to homeownership.
Lummis emphasized the need for government agencies to adapt to the needs of a modern, forward-thinking generation. The bill's prospects in Congress are uncertain, and it is unclear whether it will be incorporated into other ongoing legislative efforts. As chairwoman of the Senate Banking Committee's digital assets subcommittee, Lummis is also working on establishing a US regulatory framework for crypto markets. While Lummis has been instrumental in advocating for a federal crypto reserve, her mortgage proposal faces opposition from Senator Elizabeth Warren, who, along with other Democrats, has expressed concerns about the potential risks of using volatile digital assets in the US housing market and financial system.