21st Century Mortgage Act of 2025
Summary
The 21st Century Mortgage Act of 2025 aims to modernize mortgage risk assessments by requiring government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac to consider digital assets held in qualified custodial arrangements as part of a borrower's reserves. This bill amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Charter Act to include provisions for digital asset consideration. The Act seeks to integrate digital assets into the traditional mortgage lending process, acknowledging the growing prevalence of these assets in the financial landscape.
Expected Effects
If enacted, this bill would allow borrowers to use eligible digital assets as part of their mortgage application reserves, potentially increasing access to homeownership for individuals holding such assets. The GSEs will need to develop methodologies for assessing the risk associated with digital assets, considering factors like market volatility and liquidity. This could lead to new standards and practices within the mortgage industry regarding digital asset valuation and risk management.
Potential Benefits
- Increased Access to Homeownership: Allows borrowers with significant digital asset holdings to qualify for mortgages.
- Modernization of Mortgage Assessments: Integrates digital assets into traditional financial evaluations.
- Potential for Financial Innovation: Encourages the development of new risk assessment methodologies for digital assets.
- Recognition of Digital Asset Value: Acknowledges the legitimacy and value of digital assets in the financial system.
- Enhanced Competition: Could foster competition among lenders to attract borrowers with digital asset portfolios.
Potential Disadvantages
- Increased Risk for GSEs: Digital assets are volatile, potentially increasing the risk of mortgage defaults.
- Complexity in Risk Assessment: Assessing the value and risk of digital assets requires specialized expertise.
- Potential for Market Manipulation: The digital asset market is susceptible to manipulation, affecting asset values.
- Regulatory Uncertainty: The evolving regulatory landscape for digital assets adds complexity to mortgage assessments.
- Custodial Arrangement Requirements: Strict custodial requirements may limit the types of digital assets that can be considered.
Constitutional Alignment
The bill's alignment with the US Constitution is primarily through Congress's power to regulate commerce (Article I, Section 8). By influencing the mortgage market and the GSEs, the bill indirectly affects economic activity. There are no apparent conflicts with individual rights or freedoms guaranteed by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).