Better and Coinbase Fund First Fannie Mae-Backed Mortgage Using Bitcoin Collateral
Better Home & Finance and Coinbase announced funding of the first Fannie Mae-backed US mortgage that uses Bitcoin as collateral for a down payment loan. The structure lets borrowers avoid selling crypto holdings, though the companies and the reporting sources differ on the collateral ratios and product scope.
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The First Closing
Better Home & Finance (NASDAQ: BETR) and Coinbase (NASDAQ: COIN) said Thursday that they have funded the first Fannie Mae-backed mortgage in the United States collateralized by Bitcoin. The debut loan closed for a married couple in their early 30s from Ann Arbor, Michigan, identified as Joe and Amy, who pledged Bitcoin holdings to fund their down payment rather than selling them.
The announcement follows a partnership the two companies unveiled in March. Coinbase has framed the milestone as evidence that crypto holdings can serve a practical purpose beyond sitting in a wallet.
How the Loan Is Structured
The transaction uses two loans. The borrower takes a standard 15- or 30-year conforming mortgage backed by Fannie Mae on the property, and a separate, privately financed loan covers the down payment. The down payment loan is secured by pledged Bitcoin or USDC, and both loans carry the same rate and term so payments consolidate into one monthly bill. Per the companies, pledged crypto is held in Coinbase Prime custody for the life of the loan and returned on full repayment.
The product carries no margin calls, according to Better and Coinbase. A decline in Bitcoin's price does not require the borrower to post additional collateral, and market moves alone cannot trigger liquidation. Collateral is at risk only if a borrower becomes at least 60 days delinquent on mortgage payments.
The sources differ on the collateral ratios. One report states that Bitcoin requires collateral equal to 250% of the down payment loan and USDC 125%. The second report, which quotes the same companies, does not give these figures, so the ratios are reported by a single source and have not been independently confirmed.
Scope and Market Context
At launch the product supports Bitcoin and USDC. Better CEO Vishal Garg has said the company plans to expand eligible assets to include tokenized equities, fixed income and other real estate assets, though no timeline was given.
Better said 41% of its pre-approved customers qualify on income and credit but lack the cash for a traditional down payment. The National Association of Realtors reports that the median age of first-time US homebuyers reached a record 40, up from 32 a decade ago.
The regulatory pathway traces to a June 2025 directive from the Federal Housing Finance Agency instructing Fannie Mae and Freddie Mac to recognize digital assets as eligible collateral in the $18.5 trillion US mortgage market. The announcement is the first product launch under that directive that the companies have disclosed.
What the Companies Are Saying
The borrower said in company materials that he and his wife did not want to give up a decade of investing to buy a home, and that the loan let them avoid selling Bitcoin, timing the market or resetting their finances. Coinbase's Head of Consumer & Platform Partnerships, Mark Troianovski, described the loan as a tangible example of digital-asset wealth reaching homeownership.
The companies have not disclosed the loan amount, the property location beyond the borrowers' city, or the number of additional transactions in the pipeline.
Why It Matters
For Traders
Bitcoin-collateralized mortgages create no margin-call exposure, so the product adds no forced-selling pressure, but watch for disclosed loan volumes.
For Investors
A conforming mortgage accepting crypto collateral signals regulatory acceptance of digital assets in the $18.5 trillion US mortgage market.
For Builders
Custody, collateral valuation and delinquency-triggered liquidation are the integration points for any protocol wanting to serve similar borrowers.
This article is for information only and is not financial advice. Read the full disclaimer.
