Coinbase and Better closed the first Fannie Mae-backed mortgage using Bitcoin collateral, opening a new path for crypto-backed home financing.
Bitcoin News
Coinbase and mortgage lender Better Home & Finance Holding Company closed the first home loan backed by Fannie Mae using Bitcoin (BTC) as collateral on June 4. The companies said they plan to make the product available to qualified borrowers across the US within the coming months. The product currently supports BTC and the USDC stablecoin as eligible collateral, with plans to expand to additional digital assets as the market develops.
The borrowers are Joe and Amy, a married couple in their early 30s from Ann Arbor, Michigan. Joe works as a software engineer, and Amy is a graduate student. The couple had built savings primarily in digital assets but did not have enough cash available for a standard down payment. They pledged their BTC as collateral rather than selling it, allowing them to avoid capital gains taxes and preserve potential future price appreciation.
"At Coinbase, we believe that bitcoin should do more than sit in a wallet. It should work for the people who hold it," said Mark Troianovski, head of consumer and platform partnerships. He described the closed loan as one of the most tangible demonstrations of that vision to date.
How the 2-Loan Structure Works
The product involves two loans that close at the same time. The first is a standard Fannie Mae conforming mortgage. The second is a separate crypto-backed loan that funds the down payment. Both loans carry the same interest rate and follow the same amortization schedule, producing a single monthly payment for the borrower. The pledged crypto is held in custody for the life of the loan through Better's custodial account on Coinbase's platform.
To illustrate the mechanics, a buyer purchasing a $500,000 home could take out a $400,000 Fannie Mae mortgage and use a separate $100,000 crypto-backed loan for the down payment. Securing that second loan requires pledging approximately $250,000 in BTC, reflecting a collateral ratio of roughly 2.5-to-1 for bitcoin. For USDC-backed loans, the ratio is 1.25-to-1. Loan sizes follow standard Fannie Mae conforming limits, which vary by region, and both 15-year and 30-year fixed-rate terms are available.
Better has stated that routine BTC price swings will not trigger margin calls or forced liquidations. The lender does, however, reserve the right to liquidate pledged crypto if a borrower falls 60 days behind on payments.
The product became viable after FHFA director Bill Pulte ordered the agency to recognize digital assets held on centralized exchanges as eligible collateral. The directive aligned the FHFA with President Trump's stated goal of positioning the US as a global destination for crypto. The agency specified that only assets held on centralized exchanges would qualify, excluding those in self-custodial wallets. Historically, mortgage lenders had evaluated only traditional assets such as stocks and bonds when assessing homebuyer eligibility.
Demand ahead of the nationwide rollout has been strong. The waitlist represents approximately $250 million in potential loan volume, with more than half of prospective borrowers planning to purchase within six months. Around 76% of waitlist applicants are already Coinbase users. California, New York, and Florida account for the top three states by level of interest. Better, which has funded more than $110 billion in home loans to date, said 41% of its pre-approved customers qualify on income and credit but lack sufficient cash for a traditional down payment.
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