Headline: Fannie Mae-Backed Mortgages Secured with Bitcoin Go Live — Coinbase and Better Close First Deal
Coinbase and mortgage lender Better have closed what they say is the first government-guaranteed mortgage secured by Bitcoin. A Michigan couple used Bitcoin as collateral for their down payment to obtain a Fannie Mae-backed home loan — a move Coinbase announced on Thursday and plans to expand to qualified borrowers nationwide in the coming months.
How it works
- Borrowers pledge crypto (Coinbase initially supports Bitcoin and Circle’s USDC) as collateral rather than selling their holdings. That avoids triggering capital gains and preserves future upside.
- Customers receive two loans: a standard Fannie Mae-conforming mortgage that follows federal rules, plus a second lien tied to the pledged crypto.
- Better gives an example: a buyer can cover a $100,000 down payment by placing a second lien and pledging $250,000 in Bitcoin. If a borrower falls 60 days delinquent, Better says it may liquidate the pledged crypto.
- Better’s website stresses that, unlike margin-style crypto loans, price swings do not produce automatic liquidations and “price volatility has absolutely no impact.”
Why this matters
For years traditional mortgage underwriting treated crypto as too volatile to count toward down payments; lenders generally accepted cash, stocks or bonds instead. Allowing exchange-held digital assets to secure a down payment creates a new bridge between crypto wealth and conventional home financing — potentially opening the market to “tens of millions” of Americans who have built wealth in digital assets, as Coinbase’s Head of Consumer and Platform Partnerships Mark Troianovski put it.
Regulatory and industry context
The shift followed direction from Federal Housing Finance Agency (FHFA) Director Bill Pulte, who last year urged the agency to align more with a pro-crypto agenda. The FHFA specified that only digital assets held on centralized platforms — not those in self-custodial wallets — would be eligible for consideration in mortgage underwriting.
Other lenders are moving similarly. In January, national wholesale lender Newrez said it would begin recognizing Bitcoin and Ethereum for certain non-agency mortgage products (applying steep discounts to crypto holdings). Pulte marked that announcement with an “it begins” post on X.
Pushback and risks
Not everyone welcomes the pivot. Sen. Elizabeth Warren warned that counting crypto in mortgage underwriting could introduce “unnecessary risks to consumers” and threaten the safety and soundness of U.S. housing and financial markets. Key risks include the potential for large crypto price swings, second-lien liquidation triggers after delinquency, and reliance on centralized custodians — the very criteria FHFA chose to permit.
What’s next
Coinbase first announced the product in March and says it will roll the offering out to qualified borrowers around the country in the coming months, initially supporting Bitcoin and USDC. Lenders and regulators will be watching closely as this new pathway between crypto and conventional mortgage finance is tested in the market.
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