Better Home & Finance Holdings Inc. (NASDAQ: BETR) and Coinbase (NASDAQ: COIN) on Thursday announced the financing of the first Fannie Mae-backed mortgage collateralized by Bitcoin in the United States, marking what the two companies described as a pivotal moment in bridging the wealth of digital assets and traditional home ownership.
The first loan was closed by Joe and Amy, a couple in their early 30s from Ann Arbor, Michigan, who used their bitcoin holdings as collateral to fund the down payment instead of liquidating their position, the company said. He said.
The couple pledged their cryptocurrency through Coinbase’s custody infrastructure and obtained a matching mortgage through Better without incurring capital gains taxes or giving up their long-term exposure to Bitcoin’s potential upside.
“Purchasing our first home had always been the goal, but I wasn’t willing to give up a decade of investment to reach that goal,” the homebuyer said. “With this mortgage, I didn’t have to choose. We closed on our house and my bitcoin remained intact. We didn’t have to liquidate, we didn’t have to time the market, and we didn’t have to start over financially to achieve our homeownership goals. And that means everything.”
Bitcoin as a loan collateral
The structure includes two separate loans. Borrowers first get a standard amount backed by Fannie Mae for 15 or 30 years Mortgage loan On the property itself. The second privately financed loan – collateralized in Bitcoin or USDC – covers the down payment. Both loans carry the same interest rate and term, and are combined into one monthly payment.
Pledged cryptocurrencies are held in custody by Coinbase Prime for the duration of the loan and are returned upon full repayment.
Most importantly, the product does not carry any margin calls. If the price of Bitcoin falls, borrowers will not be required to add collateral, and market movements alone cannot trigger liquidation. Collateral is only at risk if the borrower is at least 60 days delinquent, consistent with standard foreclosure timelines in traditional housing financing.
The product initially supports Bitcoin and USDC, with Bitcoin requiring collateral equal to 250% of the down payment loan and USDC at 125%. Better CEO Vishal Garg noted plans to eventually expand eligible assets to include tokenized stocks, fixed income, and other real assets.
The problem is that it is targeted
Better yet, 41% of its pre-approved customers are income and credit qualified but lack the cash for a traditional down payment. That gap has widened as homeownership grows out of reach: The average age of first-time homebuyers in America has reached a record 40 years, up sharply from 32 a decade ago, according to the National Association of Realtors.
The product is designed to serve buyers whose wealth is concentrated in digital assets rather than liquid cash or traditional savings accounts.
Regulatory path It has been erased Partially by June 2025 Guidance From the Federal Housing Finance Agency (FHFA) which has instructed Fannie Mae and Freddie Mac to recognize digital assets as eligible collateral in the $18.5 trillion mortgage market.
This guidance laid the foundation for this week’s announcement and product launch.
