Better and Coinbase have closed the first Fannie Mae-backed mortgage in the US collateralized by Bitcoin. This allows homeowners to use Bitcoin for down payments without selling crypto or incurring capital gains taxes. Pledged crypto is held by Coinbase and returned upon loan repayment.
Better Home & Finance Holding Company and Coinbase announced the closing of the first Fannie Mae-backed mortgage in the United States collateralized by Bitcoin. This development allows homeowners to use their Bitcoin holdings for down payments without liquidating their positions or incurring immediate capital gains taxes. The product involves two loans: a conventional mortgage for the property and a second, privately financed loan secured by pledged Bitcoin or USDC for the down payment. The pledged crypto is held in Coinbase Prime custody and is returned upon full loan repayment. Critically, the product has no margin calls; collateral is only at risk if a borrower is 60 days delinquent on payments. Bitcoin requires collateral equal to 250% of the down payment loan, while USDC requires 125%. Better CEO Vishal Garg indicated plans to expand eligible assets to include tokenized equities, fixed income, and other real estate assets. This offering targets buyers whose wealth is concentrated in digital assets, addressing the gap where 41% of pre-approved customers lack cash for a traditional down payment. The regulatory pathway was cleared by a June 2025 FHFA directive instructing Fannie Mae and Freddie Mac to recognize digital assets as eligible collateral.
This innovation bridges the gap between traditional finance and the digital asset economy, potentially opening new avenues for homeownership for crypto-wealthy individuals and signaling a broader acceptance of digital assets as collateral.