Mortgage giant Fannie Mae just opened the door for crypto holders to buy homes without selling their digital assets. In a first of its kind move, homebuyers can now pledge Bitcoin or USDC as collateral for down payments on government-backed home loans. The partnership between Better Home & Finance and Coinbase could reshape how millions of Americans think about homeownership.
How the Crypto Mortgage Product Works
Fannie Mae will accept crypto-backed mortgages via a new product by Better Home and Finance and Coinbase.1 It is not the first crypto-backed mortgage, but it is the first accepted by Fannie Mae, which is under government conservatorship.1
Here is how the structure works. A borrower must have a Coinbase account and would take out a regular mortgage with Better as well as a second loan, backed by either Bitcoin or USD Coin. The second loan would fund the down payment on the first loan.1
As an example, on a $500,000 home, a borrower can pledge $250,000 in Bitcoin and get a $100,000 loan to cover the cash down payment.1
The assets remain in custody through Coinbase Prime for the duration of the loan and are returned once the debt is fully settled.2 Both loans are held by Better, and the crypto assets, once pledged, cannot be traded.1
This product is designed to help crypto holders who are rich in digital assets but short on cash for a traditional down payment.
“We have now finally created the infrastructure rails to enable any tokenized asset in America to be able to be pledged to help someone afford to buy a home,” Vishal Garg, CEO of Better, told CNBC in an interview.1
Fannie Mae crypto backed mortgage down payment Bitcoin USDC Coinbase Better
What It Costs and What Borrowers Should Know
The dual loan structure does come with trade offs. A spokesman for Coinbase said via email that the rates for the crypto-backed mortgages will be higher than a standard 30-year by between half a percentage point and 1.5 percentage points, depending on the consumer profile.3
One of the unique things about Better’s structure is that both loans share the same interest rate and amortization term, so you only have to manage one combined monthly payment.4
Here are the key features borrowers need to understand:
- No margin calls. Better said that its new crypto-backed mortgages will have “no margin calls” and “no top-ups.”5
- No forced liquidation from price drops. If BTC drops in value, the mortgage terms remain unchanged and no additional collateral is required. Market movements alone never trigger liquidation.3
- Liquidation risk only after 60 days of missed payments. The pledged crypto is only at risk of liquidation in the event of a 60-day mortgage payment delinquency.6
- USDC holders can earn rewards. In the case of USDC, they can keep earning rewards, Coinbase said.3
- No private mortgage insurance on the second loan. There is also no private mortgage insurance on the second loan.1
- Coinbase One member perk. All Coinbase One members who are approved for a crypto-backed or regular mortgage product through Better will be eligible for a rebate worth 1% of the mortgage value, capped at $10,000, to cover closing costs and fees.4
| Feature | Crypto-Backed Mortgage (Better + Coinbase) | Traditional Mortgage |
|---|---|---|
| Down Payment | Pledge BTC or USDC as collateral | Cash required |
| Interest Rate | 0.5% to 1.5% higher than standard | Standard conforming rate |
| Margin Calls | None | Not applicable |
| Crypto Liquidation | Only after 60 day delinquency | Not applicable |
| PMI on Second Loan | No | May apply below 20% down |
| Tax Event at Closing | Avoided | Potential if selling assets |
Why This Matters for 52 Million Crypto Holders
Better was founded to make homeownership more accessible for all Americans, and this partnership with Coinbase introduces a new pathway for the 52 million Americans who own digital assets.7
The timing is significant. According to Coinbase’s 2025 State of Crypto Report, 45% of younger investors say they already own crypto, compared with 18% of older investors, making younger generations 2.5 times more likely to be token holders.7
Gen Z and Millennials say that 25% of their portfolio is in non-traditional assets like crypto, and 73% of people in these generations say it is harder for them to build wealth by traditional means.8
For many young Americans, crypto is not a side bet. It is a core part of their financial identity. Until now, tapping into that wealth to buy a home meant selling, paying capital gains taxes and giving up future upside.
Some 41% of American families fail to buy a home because they do not have enough funds for the down payment, even though they have money elsewhere in savings, Better founder Vishal Garg said.3
“The ability to transform digital wealth into housing access is an exciting milestone in our mission to increase economic freedom,” said Max Branzburg, Head of Consumer and Business Products at Coinbase. “Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional downpayment.”7
The Policy Shift Behind the Product
This product did not happen overnight. It traces back to a direct order from the top of the federal housing system.
FHFA Director William J. Pulte’s June 25, 2025 directive ordered Fannie Mae and Freddie Mac to accept cryptocurrency as financial reserves without requiring conversion to dollars, a direct reversal of Fannie Mae’s longstanding guideline B3-4.1-04 that had blocked digital assets from underwriting since 2022.9
Pulte posted to X: “After significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world,” he ordered Fannie Mae and Freddie Mac to begin preparing for crypto integration.10
The directive came with strict guardrails. A 50 to 60% volatility haircut applies, meaning $100,000 in BTC counts as $40,000 to $50,000 toward reserve requirements. Assets must be held on U.S.-regulated exchanges, and self-custodied cold wallets are currently excluded.9
Not everyone is on board. Senators Jeff Merkley and Elizabeth Warren, along with other lawmakers, raised concerns about the directive, arguing it could introduce unnecessary risks to consumers and pose serious safety and soundness concerns for the U.S. housing and financial markets.11
Other Lenders Are Already in the Race
Better and Coinbase may be first to the Fannie Mae finish line, but they are not alone in the crypto mortgage space.
Miami-based Milo announced it has surpassed $100 million in total loan originations, including its largest single transaction to date, a $12 million crypto mortgage in Tennessee.12 The company said its mortgage portfolio has maintained a perfect track record of zero margin calls despite recurring periods of cryptocurrency volatility.12
However, products from companies like Milo are not yet compliant with Fannie Mae. They can be far more expensive than the Better product and require all crypto assets to be used as collateral, not just a certain amount.1
Newrez, which is owned by Rithm Capital with roughly $53 billion in assets under management, announced at the end of 2025 that it would launch a crypto-backed mortgage program.13
The bigger picture is hard to ignore. This is the $12 trillion U.S. residential mortgage market formally recognizing Bitcoin reserves as collateral-adjacent assets.9
Better and Coinbase also plan to expand eligible collateral types over time to include tokenized equities, fixed income and other tokenized real estate assets, if market and regulatory conditions allow.6
Whether you see this as a breakthrough for financial inclusion or a risky experiment mixing volatile assets with the housing market, one thing is clear. The walls between crypto wealth and traditional homeownership are coming down. For millions of young Americans who built their savings in Bitcoin instead of bank accounts, this could be the moment that finally brings the dream of owning a home within reach. Drop your thoughts in the comments below and let us know what you think about crypto-backed mortgages.
