Coinbase and Better close first bitcoin-backed conventional mortgage, plan summer rollout

Popular crypto exchange Coinbase in partnership with Better Home & Finance have launched the very first Fannie-Mae backed mortgage with Bitcoin used as collateral, creating a path for crypto holders to acquire homes without selling their assets.

The two companies announced on Wednesday that a couple in Ann Arbor, Michigan, closed on the very first loan of such, which lets qualified borrowers use their Bitcoin or USDC to hedge down payments for homes, instead of liquidating holdings and triggering capital gains taxes. A nationwide launch is planned for the summer of 2026, according to the joint press release.

The mortgage product details

The mortgage comprises one standard Fannie-Mae conforming mortgage, in addition to a separate loan collateralized with crypto covering the down payment.

For example, if a borrower wants to acquire property worth $500,000, the individual could take out a $400,000 regular mortgage loan in addition to a $100,000 crypto-backed loan for the remaining 20% of the total. Bitcoin-backed loans require collateral at a roughly 2.5 to 1 ratio, meaning that the borrower would need to own at least $250,000 in Bitcoin on Coinbase for this particular example. USDC-backed loans, however, carry a lower ratio of 1.25-to-1.

Both loans share the same interest rates and amortization schedule, with single monthly payments. The crypto collateral sits in a custodial account on Coinbase’s platform throughout the loan period. The mortgage product offers 15 and 30-year fixed-rate terms.

Customer’s thoughts

Joe and Amy, a married couple in their early 30s, were the inaugural customers of the new crypto mortgage scheme. Joe, a software engineer, and Amy, a graduate student, had accumulated crypto savings but did not have enough cash at hand for a traditional down payment for a house.

“The two alternatives me and my wife were looking at was either selling and paying long-term cap gains or using a margin loan type structure, which is quite stressful because the interest rate is obviously very variable,” Joe told Yahoo Finance. “And then there’s also a margin call risk associated with that, which is obviously scary.”

Joe described the crypto-backed mortgage as “definitely compelling.” Amy was “a little skeptical,” he admitted, but his wife came around after the loan closed successfully.

What is Fannie Mae backing and why it matters

The Fannie Mae backing and integration helps to distinguish this mortgage product from a regular private crypto lending arrangement. Vishal Garg, Better’s founder and CEO, told Yahoo Finance that mortages backed with Fannie Mae and Freddie Mac together both handled purchases worth $1.2 trillion last year.

This backing means the crypto mortgage structure with Coinbase can immediately access the existing secondary market instead of being remaining a niche offering. “It basically means that you have a U.S. government-sponsored enterprise accepting digital assets as a replacement for cash in a bank account as collateral,” Garg said.

Better reports that 41% of its pre-approved customers meet income and credit requirements but fall short on cash for an immediate payment, according to the company’s press release. First-time homebuyers in the U.S. now have a median age of 40, up from 32 a decade ago, per data from the National Association of Realtors cited by Better.

Rising demand among Coinbase users

The waitlist for the crypto mortgage feature holds almost $250 million in projected loan volume. 76% of the signups on the product’s waitlist are existing Coinbase users, with 37% holding $500,000 or more in crypto, and 63% looking to purchase a home within six months, Yahoo Finance reported. California, New York, and Florida are the locations with the highest concentration of interest in the crypto mortgage product.

Mark Troianovski, head of consumer and platform partnerships at Coinbase, said the mortgage partnership represents a concrete use case for crypto wealth beyond trading. “Tens of millions of Americans have built real wealth in digital assets,” he said in the press release. “That wealth now has a direct path to homeownership.”

Bitcoin and USDC have been announced as the only supported cryptocurrencies at launch, with both companies stating plans to add more digital assets over time.