What Happened?
Senator Cynthia Lummis from Wyoming is advocating for a new legislative proposal called the 21st Century Mortgage Act. The initiative aims to modernize mortgage lending by incorporating digital assets, such as cryptocurrencies, into mortgage risk assessments. This proposal follows a directive for Fannie Mae and Freddie Mac to explore the use of cryptocurrencies in determining mortgage eligibility.
Who Does This Affect?
This push primarily impacts first-time home buyers, especially younger individuals who hold digital assets. These potential homeowners often find real estate prices prohibitive and may struggle to meet traditional mortgage qualifications. By including cryptocurrencies as part of net worth, more young people might qualify for home loans.
Why Does This Matter?
The 21st Century Mortgage Act could significantly impact the housing market by potentially increasing homeownership rates among young people who own digital assets. If implemented, it might shift how mortgage risk assessments are conducted and influence how financial institutions evaluate prospective homeowners. However, the stability and viability of using cryptocurrencies for this purpose remain uncertain, posing questions about long-term market impacts.