Coinbase is partnering with Better Home & Finance to roll out crypto-backed mortgages backed by Fannie Mae, marking a step toward integrating digital assets into traditional housing finance.
The new offering allows qualified borrowers to pledge Bitcoin or USDC as collateral for a down payment without selling their holdings, avoiding potential capital gains taxes while maintaining exposure to their assets.
Structured as conforming loans, the mortgages carry the same standards and protections as traditional Fannie Mae-backed loans. Better originates and services the loans, while Coinbase provides custody and infrastructure for the pledged bitcoin or crypto.
The product targets a long-standing barrier in the housing market: the upfront cost of a down payment.
According to Better, roughly 41% of American families fail to purchase homes due to insufficient liquid cash, even when they hold other forms of wealth.
“For decades, the path to homeownership has required Americans to sell assets, liquidate investments, or withdraw retirement savings,” said Better CEO Vishal Garg. “This partnership introduces a new pathway for millions of Americans who hold digital assets.”
The companies estimate that around 52 million Americans — roughly 20% of adults—have owned digital assets, according to a company press release.
By allowing borrowers to pledge crypto instead of cash, the product aims to unlock that balance sheet for housing access.
Wall Street Journal reporting helped with the coverage of this news.
Bitcoin-backed mortgages
Unlike traditional crypto-backed lending, the mortgages are designed to minimize volatility risk for borrowers. The loans do not include margin calls or collateral top-ups. If bitcoin’s price falls, borrowers are not required to add more collateral, and market movements alone do not trigger liquidation.
Collateral is only at risk if a borrower becomes at least 60 days delinquent on mortgage payments, aligning with standard foreclosure timelines in conventional housing finance.
Interest rates on the crypto-backed structure are expected to be higher than standard 30-year mortgages by roughly 0.5 to 1.5 percentage points, depending on borrower profiles. Still, Coinbase argues the tradeoff may be worth it for borrowers seeking to avoid liquidating assets.
“The ability to transform digital wealth into housing access is a milestone,” said Max Branzburg, head of consumer and business products at Coinbase. “Token-backed mortgages are a first step toward unlocking homeownership for younger generations.”
The product reflects shifting wealth patterns, particularly among younger Americans. Coinbase data shows 45% of younger investors own crypto, compared with 18% of older cohorts, suggesting digital assets are becoming a primary store of value for a new generation.
At the same time, housing affordability has deteriorated. Home prices have outpaced income growth, leaving many would-be buyers asset-rich but cash-poor. Token-backed mortgages attempt to bridge that gap by treating crypto holdings as usable collateral rather than speculative investments.
Better has previously experimented with alternative collateral models. In 2023, the firm allowed certain Amazon employees to pledge stock as down payments for loans. Executives say adding bitcoin and crypto could have expanded lending demand significantly, with Garg estimating the company may have missed up to $40 billion in originations by not offering such products earlier.
The structure also introduces new features unique to digital assets. Borrowers pledging USDC may continue to earn yield on their holdings, potentially offsetting mortgage costs. In addition, Coinbase’s custody model allows users to pledge specific portions of their portfolio rather than locking up all assets.
The companies say they plan to expand the range of eligible collateral over time, potentially including tokenized equities, fixed income instruments, and real estate assets.
While crypto-backed mortgages have existed in niche wealth management channels, the involvement of Fannie Mae signals a shift toward broader adoption. As a government-sponsored enterprise, Fannie Mae sets standards for a large portion of the U.S. mortgage market.
By aligning bitcoin collateral with conforming loan structures, the Coinbase-Better partnership positions digital assets as part of mainstream financial infrastructure rather than a parallel system.
Coinbase described the product as “as American as apple pie,” framing it as an evolution of home financing rather than a departure from it.
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