Better and Coinbase Complete First Bitcoin-Backed Fannie Mae-Eligible Mortgage

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Better and Coinbase said they have completed a Fannie Mae-eligible mortgage that uses Bitcoin and USDC as collateral, an early example of cryptocurrency being integrated into conventional home financing while allowing borrowers to retain ownership of their digital assets.

First unveiled in March, the program enables eligible homebuyers to leverage Bitcoin and USDC holdings as collateral when purchasing a home without selling their digital assets. The offering currently supports Bitcoin and the USDC stablecoin, while additional cryptocurrencies could be incorporated in the future, subject to market demand and regulatory considerations.

• Better and Coinbase say they completed a Fannie Mae-eligible mortgage involving crypto collateral.
• The structure combines a conventional mortgage with a separate crypto-backed loan.
• Bitcoin and USDC are pledged as collateral and held in custody by Coinbase.
• Borrowers make a single monthly payment covering both loan components.
• Liquidation of crypto collateral is reportedly triggered only after extended borrower delinquency, not routine price swings.

According to the companies, the arrangement pairs a standard conforming mortgage originated through Better with a second loan secured by cryptocurrency assets. The crypto collateral is held in custody by Coinbase, which also provides compliance and operational support for the program.

The structure is designed to allow borrowers with sufficient income and credit profiles to use digital assets to meet liquidity requirements typically associated with home purchases, such as down payments, without selling their holdings.

Borrower Example

The companies said the first borrowers were a couple from Ann Arbor, Michigan, who used Bitcoin holdings as collateral to finance a home purchase. The borrowers are described in company statements as avoiding liquidation of their crypto assets as part of the arrangement.

A borrower quoted in the announcement said the structure allowed them to proceed with a home purchase without selling long-term Bitcoin holdings.

Risk Management and Structure

Better CEO Vishal Garg said the product reflects changing patterns of wealth accumulation, arguing that many prospective homebuyers now hold a significant portion of their assets in digital currencies rather than traditional savings accounts.

“The 30-year fixed mortgage was designed for a generation that kept its savings in a bank account and built equity through a single employer. That’s not the financial reality of millions of qualified buyers today that are building real wealth in digital assets,” said Vishal Garg, Founder and CEO of Better.

Unlike many crypto-backed lending products that require frequent margin calls, the program reportedly does not liquidate collateral during normal market volatility. Instead, liquidation would only occur after a borrower becomes significantly delinquent on payments, according to the companies.

The model is positioned by Better as reflecting broader changes in asset ownership patterns, particularly among younger borrowers with higher exposure to digital assets.

Industry Context and Regulatory Background

The initiative follows prior signals from U.S. housing regulators encouraging exploration of digital assets in mortgage underwriting. However, broader regulatory standards for crypto-linked mortgage structures remain under development.

Analysts and housing policy experts have raised concerns about the volatility of cryptocurrency markets and how such fluctuations could affect mortgage risk if the model expands beyond pilot scale.

Speaking at the end of May, Coinbase CEO Brian Armstrong argued that blockchain technology could modernize the global financial system by improving efficiency, accessibility, and cross-border transactions. He highlighted the potential for tokenized real-world assets, including stocks, bonds, real estate, and investment funds, to enable faster settlement and fractional ownership.

Armstrong also said blockchain-based infrastructure could support round-the-clock global trading and reduce the cost and settlement times associated with international payments through stablecoins. He further emphasized the role of AI-powered risk management tools and called for risk-based regulatory frameworks that encourage innovation while maintaining appropriate oversight.

Separately, Coinbase Derivatives announced plans to launch four perpetual-style equity index futures on June 8, tracking MarketVector indexes focused on artificial intelligence, aerospace and defense, China-listed ADRs, and a broader basket of Nasdaq-listed technology companies.

The program currently supports Bitcoin and USDC, with the companies indicating that additional digital assets could be added in future iterations. Industry observers say the long-term viability of such structures will depend on regulatory clarity, lender risk performance, and borrower behavior under volatile market conditions.

Conclusion

The transaction represents an early-stage experiment in integrating cryptocurrency holdings into traditional mortgage finance. While it provides a potential pathway for crypto holders to access home financing without liquidating assets, its broader adoption will depend on regulatory acceptance and how the structure performs over time in real-world lending conditions.