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Prospective homebuyers with cryptocurrency investments will soon have a new option to fund their down payments without selling their digital assets, thanks to an innovative mortgage offering announced Thursday.
Real estate services company Better Home & Finance Holding Co. is launching a crypto-backed mortgage program within the next three months in partnership with cryptocurrency trading platform Coinbase. This new financial product allows qualified borrowers to use their cryptocurrency holdings as collateral for home down payments rather than converting them to cash.
“Better was founded to make homeownership more accessible for all Americans, and this partnership with Coinbase introduces a new pathway to realizing the American Dream for the 52 million Americans who own digital assets,” said Vishal Garg, Better’s CEO, in the companies’ joint announcement.
While cryptocurrency use in real estate transactions remains relatively uncommon—only 1% of homebuyers surveyed by the National Association of Realtors reported using proceeds from crypto sales for down payments between July 2024 and June 2025—this new offering could potentially expand adoption by removing a significant barrier.
The key innovation of the Better-Coinbase mortgage is that borrowers maintain their exposure to potential cryptocurrency appreciation. Rather than liquidating their assets, qualified applicants will transfer their cryptocurrency to Coinbase as collateral, preserving their investment position while securing their mortgage.
Initially, the program will accept only Bitcoin and USDC (a type of “stablecoin” typically valued at $1) as collateral. This limited selection reflects the companies’ cautious approach in this emerging financial space, focusing on the most established cryptocurrencies.
The companies emphasized several consumer protection features in their announcement. If the value of the collateralized cryptocurrency declines, the mortgage terms remain unchanged with no additional collateral required. However, borrowers face the risk of losing their crypto collateral if they fall behind on mortgage payments for 60 days or more.
Perhaps most significantly, Better stated that the crypto-backed mortgage is “designed in accordance with Fannie Mae guidelines.” This compliance means the loans can be guaranteed by the mortgage giant, making them eligible for substantially lower interest rates than other crypto-backed loans currently available in the market.
Fannie Mae and Freddie Mac, which have operated under government conservatorship since the 2008 financial crisis, play a crucial role in the U.S. housing market by purchasing qualifying mortgages from lenders. This secondary market activity provides liquidity that helps maintain mortgage availability and affordability for consumers.
Traditionally, lenders seeking to originate mortgages that qualify for purchase by these government-sponsored enterprises have not considered cryptocurrency holdings in their underwriting process unless the assets were first converted to dollars. This practice has often forced crypto investors to choose between homeownership and maintaining their digital asset positions.
The regulatory landscape appears to be evolving, however. In June, the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, instructed the agencies to develop a proposal for considering cryptocurrency as an acceptable asset class when assessing risk in single-family home loans.
This regulatory shift, combined with Better’s new mortgage product, signals growing mainstream acceptance of cryptocurrency assets within traditional financial services. The development comes amid continued volatility in cryptocurrency markets and ongoing debates about appropriate regulatory frameworks for digital assets.
Financial markets reacted positively to the announcement for Better, with the company’s shares rising 5.4% on Thursday. Coinbase, meanwhile, saw its stock decline 4.3% amid broader cryptocurrency market fluctuations unrelated to the partnership news.
The Better-Coinbase mortgage offering represents one of the most significant integrations of cryptocurrency into conventional mortgage financing to date, potentially creating a template for other lenders as digital assets continue their gradual journey toward broader acceptance in the financial system.
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9 Comments
This partnership between Coinbase and Better Home & Finance is a bold move to cater to the growing crypto investor demographic. It could make homeownership more accessible, but the crypto collateral aspect raises some risks that will need to be carefully managed.
This crypto mortgage offering from Coinbase and Better Home & Finance is an innovative solution, but it also raises questions about the long-term stability and reliability of using digital assets as collateral. The industry will need to closely monitor how this evolves.
Crypto-backed mortgages could be a game-changer for the real estate market, allowing more crypto investors to participate. However, the inherent risks of using volatile digital assets as collateral will be crucial for lenders and borrowers to understand and mitigate.
Agreed, the volatility of cryptocurrencies will need to be carefully managed. Robust risk assessment and collateral management protocols will be essential for this product to gain widespread adoption.
Crypto-backed mortgages could be a game-changer, making homeownership more accessible for crypto investors. However, the volatility of digital assets poses significant risks that lenders and borrowers will need to thoroughly understand and mitigate.
While the idea of using cryptocurrencies as mortgage collateral is intriguing, the inherent volatility of digital assets could introduce substantial risks. Careful underwriting and risk management will be crucial for the success of this new financial product.
Interesting move by Coinbase and Better Home & Finance to offer crypto-backed mortgages. This could open up homeownership to more crypto investors who don’t want to cash out their digital assets. Curious to see how this new product will be received by the market.
The ability to use cryptocurrencies as collateral for mortgages is an intriguing development. It may open up new avenues for homebuyers, but the volatility of digital assets could also introduce challenges that lenders and borrowers will need to navigate.
A crypto-backed mortgage is a creative way to leverage digital asset holdings for real estate. It may help increase adoption of cryptocurrencies in the mainstream, though some may have concerns about the volatility of crypto collateral. Overall, an innovative solution worth monitoring.