Coinbase teams up with Better to launch crypto-backed home loans, allowing you to pay your down payment without selling Bitcoin.

This is the most significant step for cryptocurrency assets to enter the traditional financial mortgage system.

Author: The Defiant

Translated by: Deep Tide TechFlow

Deep Tide Introduction: 52 million American adults hold digital assets, yet have been unable to use these assets in traditional mortgage applications—this product changes that.

Bitcoin or USDC can be directly used as collateral for the down payment, without needing to sell the coins or triggering tax events, and it receives Fannie Mae endorsement, with interest rates equivalent to standard compliant mortgages. This is the most significant step for cryptocurrency assets to enter the traditional financial mortgage system.

The full text is as follows:

Coinbase and Better Home & Finance announced a partnership on Thursday to launch a token-supported mortgage product. This product aims to broaden home purchasing channels and has received Fannie Mae endorsement, just like other compliant mortgages.

Eligible Americans can now pledge Bitcoin or USDC as collateral to pay cash down payments, thereby obtaining standard compliant mortgages without needing to sell digital assets or trigger taxable events.

How it works

Borrowers do not need to raise cash for the down payment but can pledge cryptocurrency as collateral for a separate loan that covers the down payment. There are two loans at closing: one is a standard Fannie Mae mortgage for the property, and the other is a secondary loan secured by the pledged cryptocurrency. Both loans share the same interest rate and repayment term, and the borrower only needs to manage a consolidated monthly payment—both companies call this a market first.

These mortgages are designed according to Fannie Mae guidelines and structured as standard compliant loans, and the two companies state that this will result in interest rates significantly lower than traditional token-supported loans.

No margin calls triggered

If the value of Bitcoin drops, the mortgage terms remain unchanged, and no additional collateral is required. Market fluctuations alone will not trigger liquidation. The situation where collateral faces liquidation risk is limited to borrowers being 60 days overdue on payments, which is handled the same way as compliant mortgages.

For borrowers pledging USDC, the collateral can earn rewards, helping to offset part of the mortgage payments and thereby reducing the net effective interest rate.

Coinbase One members who successfully secure a cryptocurrency-supported mortgage or a standard mortgage through Better can receive a cashback equivalent to 1% of the mortgage amount, capped at $10,000, to cover closing costs.

Why it matters

For decades, the path to homeownership for Americans required selling assets, liquidating investments, or tapping into retirement savings to pay cash down payments, often triggering capital gains taxes or early withdrawal penalties. Market reports indicate that approximately 52 million American adults, or about 20% of the adult population, have held digital assets.

Previously, borrowers could not obtain credit recognition for these assets in the traditional mortgage approval process without first liquidating digital assets. Cryptocurrency-supported mortgages change that, allowing on-chain wealth to convert into real-world home buying opportunities while preserving long-term investment positions and broadening home purchasing channels.

Better CEO Vishal Garg stated that this partnership “opens a new path for the 52 million Americans holding digital assets to realize the American dream.”

The two companies plan to expand the types of acceptable collateral over time, including tokenized stocks, fixed-income products, and other tokenized real estate assets, depending on market and regulatory conditions.