Legislation in the U.S. contemplating the acceptance of Bitcoin for residential mortgages
## Title: H.R. 4374: A Potential Game-Changer for Cryptocurrency in U.S. Mortgage Evaluations
In a significant move towards modernizing the mortgage industry, Representative Nancy Mace of South Carolina has introduced H.R. 4374, a bill that could revolutionize how cryptocurrencies like Bitcoin are considered in U.S. mortgage underwriting processes.
### Key Provisions of the Bill
If enacted, the bill would mandate federal mortgage agencies and lenders to consider a borrower’s cryptocurrency holdings, specifically those stored in regulated brokerage accounts, when evaluating mortgage applications. This is a departure from the current practice where traditional mortgage underwriting relies on bank balances, tax returns, and documented income, largely excluding crypto assets from consideration [1][3].
The bill aims to broaden a borrower’s financial profile by recognizing Bitcoin and other digital assets as legitimate components. This could potentially allow individuals to qualify for mortgages without needing to liquidate their crypto holdings, which is often required under existing rules [1][3].
The legislation is expected to particularly benefit groups such as veterans and young buyers who may hold significant crypto assets but have less conventional financial histories [3]. It also directs agencies to update their underwriting systems, standards, and programs—including those overseen by Fannie Mae and Freddie Mac—to accommodate crypto assets [1].
### Legislative Progress
H.R. 4374 has been referred to the House Financial Services Committee and the Committee on Veterans’ Affairs for review. It has not yet been scheduled for a full House vote, and would also need to pass the Senate and be signed by the President before becoming law [3].
### Global Perspective
This legislative effort reflects a growing recognition of the role cryptocurrencies play in Americans’ financial lives and a desire to modernize underwriting practices to reflect contemporary asset portfolios [1][3]. Meanwhile, other countries like Pakistan and El Salvador are moving quickly to embrace Bitcoin’s potential, forming partnerships to explore its use in public sector utilities and expand their BTC reserves [2].
## Comparison Table
| Current Practice | Change Under H.R. 4374 | |--------------------------------------------------|-------------------------------------------------------------| | Crypto assets excluded from mortgage assessments | Crypto holdings in brokerage accounts considered | | Borrowers must often liquidate crypto | Crypto can remain as part of borrower’s financial profile | | Traditional financial documents only | Digital assets recognized alongside bank balances, income | | No federal mandate for crypto inclusion | Agencies must update systems to account for crypto holdings |
## Conclusion
H.R. 4374, if enacted, would require U.S. mortgage lenders to consider borrowers’ regulated crypto holdings during underwriting, allowing these assets to contribute to loan eligibility without forced liquidation [1][3]. This represents a notable shift in policy, aiming to better align mortgage evaluations with the evolving financial realities of American households. The partnership between Pakistan and El Salvador underscores a growing divide in the global approach to Bitcoin's potential.
- The bill, H.R. 4374, could revolutionize the mortgage industry by mandating lenders to consider Bitcoin and other cryptocurrencies stored in regulated brokerage accounts when evaluating mortgage applications.
- If the bill is enacted, individuals might be able to qualify for mortgages without liquidating their crypto holdings, as the bill aims to broaden a borrower’s financial profile by recognizing digital assets as legitimate components.
- The legislation, expected to particularly benefit groups like veterans and young buyers, would direct agencies to update their underwriting systems and programs to accommodate crypto assets, including those overseen by Fannie Mae and Freddie Mac.
- As the U.S. considers the role of cryptocurrencies in its financial sector, other countries like Pakistan and El Salvador are moving quickly to embrace Bitcoin’s potential, forming partnerships to explore its use in public sector utilities and expand their BTC reserves.
