Key Highlights
- A groundbreaking cryptocurrency-collateralized mortgage has been introduced by Coinbase (COIN) in partnership with Better Home & Finance (BETR), with support from Fannie Mae.
- Homebuyers can use bitcoin or USDC holdings as down payment collateral without liquidating their digital assets.
- The program eliminates capital gains tax liabilities and doesn’t require margin calls regardless of cryptocurrency volatility.
- Borrowers will face interest rates approximately 0.5 to 1.5 percentage points above conventional 30-year fixed mortgages.
- Fannie Mae’s acceptance of crypto-collateralized mortgages represents a watershed moment for digital currency legitimacy in traditional finance.
In a significant development for the cryptocurrency industry, Coinbase (COIN) has partnered with mortgage provider Better Home & Finance (BETR) to introduce a bitcoin-backed home loan program, marking Fannie Mae’s inaugural acceptance of crypto-collateralized mortgage products.
This represents an unprecedented milestone, as Fannie Mae—a government-sponsored enterprise regulated by the Federal Housing Finance Agency—has never before endorsed such a financial instrument. Given Fannie’s pivotal position in the American housing finance system, this approval could catalyze widespread adoption across the mortgage industry.
The program targets mainstream American homebuyers rather than exclusively serving affluent investors. Coinbase characterized the offering as fundamentally “as American as apple pie.”
According to Better CEO Vishal Garg, approximately 41% of American households are unable to purchase homes simply because they lack sufficient cash reserves for down payments. Many of these prospective buyers possess substantial wealth tied up in alternative assets, particularly cryptocurrency holdings.
The mechanics are straightforward: prospective homeowners secure a conventional 15- or 30-year Fannie Mae-guaranteed mortgage through Better. Rather than providing cash for the down payment, they obtain a secondary loan collateralized by bitcoin or USDC stored on Coinbase.
The digital assets are moved to a custodial wallet managed by Better, though borrowers maintain full ownership privileges. Notably, USDC holders continue receiving staking rewards on their pledged collateral throughout the mortgage term.
Interest rates for this innovative product will range from 0.5 to 1.5 percentage points above standard 30-year mortgage rates, with the exact premium determined by individual borrower qualifications. Potential buyers must carefully evaluate whether this additional expense justifies preserving their cryptocurrency positions.
Market Volatility Protection: No Liquidation Triggers
A particularly attractive element of this mortgage product is its immunity to cryptocurrency price fluctuations. Should bitcoin experience a significant decline, the loan terms remain unchanged and no supplementary collateral is demanded.
Forced liquidation only occurs following 60 days of payment delinquency—identical to standard mortgage protocols. Market downturns alone cannot trigger collateral seizure.
Mark Troianovski, Coinbase’s head of consumer and platform business development, drew parallels to wealth management strategies employed by private banking institutions. “They don’t sell assets to buy stuff; they actually take loans against assets,” he explained.
Previous Crypto Mortgage Products Served Limited Markets
While cryptocurrency-backed home loans aren’t entirely novel—Miami-based fintech company Milo has provided such products since 2022 and currently serves more than 100 clients—earlier iterations predominantly targeted specialized markets, including international buyers and luxury property transactions.
Fannie Mae’s participation fundamentally transforms the landscape. As the entity responsible for purchasing, securitizing, and guaranteeing mortgages on a massive scale, Fannie’s underwriting criteria effectively establish industry-wide standards.
Better had already pioneered asset-backed down payments in February 2023, enabling Amazon employees to pledge company stock as collateral. The cryptocurrency variant employs comparable mechanics while extending availability to [[LINK_START_2]]Coinbase[[LINK_END_2]]’s extensive user base.
Gallup data indicates that 14% of American adults held cryptocurrency investments in 2025. Meanwhile, a 2025 Redfin survey revealed that nearly 13% of millennial and Gen Z homebuyers liquidated digital assets to finance down payments—transactions that trigger capital gains tax obligations this new product is specifically designed to circumvent.
The Trump administration previously instructed Fannie Mae and Freddie Mac to establish procedures for recognizing cryptocurrency as a qualifying asset on mortgage applications last June, signaling governmental support for the digital currency sector.
