Crypto-backed mortgages let homebuyers use bitcoin for down payments
A new mortgage option now lets homebuyers use bitcoin or USDC as collateral for their down payment. The scheme, launched by Better Home & Finance and Coinbase, avoids the need to sell digital assets upfront. It aims to help those who hold cryptocurrency but lack traditional savings for a deposit. The partnership between Better and Coinbase allows purchasers to secure a standard Fannie Mae-backed loan. Alongside this, they take out a secondary loan, with their bitcoin or USDC held in a custodial wallet managed by Better. Borrowers keep ownership of their assets while using them as security.
Interest rates for these loans sit 0.5 to 1.5 percentage points higher than typical 30-year mortgages. The structure also removes risks like capital gains tax or sudden margin calls if crypto prices drop. Liquidation of the digital assets only happens after 60 days of missed payments, shielding borrowers from short-term market swings. Around 41% of US households struggle to gather enough funds for a down payment. Many, however, hold significant wealth in cryptocurrency. This new offering targets exactly that group, making homeownership more accessible without forcing asset sales.
The programme marks a first for Fannie Mae, bringing crypto-backed mortgages into mainstream finance. Borrowers can now leverage digital assets while keeping their investment intact. The move could open homeownership to a wider pool of buyers who previously faced barriers due to liquidity issues.
