Coinbase Partners with Better to Launch Crypto-Backed Mortgages—Buy a Home Without Selling Your Bitcoin

Author: The Defiant

Translated and edited by TechFlow

TechFlow Intro: Fifty-two million U.S. adults hold digital assets—but until now, they’ve been unable to use those assets in traditional mortgage applications. This product changes that.

Bitcoin or USDC can be used directly as collateral for a down payment—no need to sell tokens, no taxable event triggered—and the loan is backed by Fannie Mae, with interest rates identical to those of conventional, compliant mortgages. This marks the most substantive step yet toward integrating crypto assets into the traditional financial collateral system.

Full article below:

Coinbase and Better Home & Finance announced a partnership on Thursday to launch a token-backed mortgage product, designed to expand home-buying access while maintaining Fannie Mae backing—just like other compliant mortgages.

Eligible U.S. residents can now pledge Bitcoin or USDC as collateral to cover their cash down payment and secure a standard, compliant mortgage—without selling their digital assets or triggering a taxable event.

How It Works

Rather than raising cash for the down payment, borrowers pledge crypto assets as collateral for a separate loan covering the down payment amount. At closing, two loans are originated: a standard Fannie Mae-backed mortgage for the property, and a secondary loan secured by the pledged crypto assets. Both loans share the same interest rate and repayment term, and borrowers make a single, consolidated monthly payment—a market-first, according to the two companies.

These mortgages are structured in accordance with Fannie Mae guidelines as standard compliant loans, and the companies say this design will result in significantly lower interest rates compared to traditional token-backed loans.

No Margin Calls

If Bitcoin’s price declines, the mortgage terms remain unchanged and no additional collateral is required. Market volatility alone does not trigger liquidation. Liquidation of collateral occurs only if the borrower defaults on payments for 60 days—consistent with standard compliant mortgage practices.

Borrowers pledging USDC earn rewards on their collateral, helping offset part of their mortgage payments and thereby lowering the net effective interest rate.

Coinbase One members who successfully close either a crypto-backed or conventional mortgage through Better receive a rebate equal to 1% of the mortgage amount—capped at $10,000—to help cover closing costs.

Why It Matters

For decades, the path to homeownership in the U.S. has required Americans to sell assets, liquidate investments, or withdraw retirement savings to fund a cash down payment—often triggering capital gains taxes or early withdrawal penalties. Market reports indicate approximately 52 million U.S. adults—roughly 20% of the adult population—have held digital assets.

Prior to this, borrowers could not have their digital assets recognized for credit purposes within the traditional mortgage underwriting process unless they first liquidated them. Crypto-backed mortgages change that, enabling on-chain wealth to translate into real-world home-buying opportunities—while preserving long-term investment positions and expanding access to homeownership.

Vishal Garg, CEO of Better, said the partnership “opens a new pathway to the American Dream for the 52 million Americans holding digital assets.”

The companies plan to gradually expand the range of acceptable collateral types over time—including tokenized equities, fixed-income products, and other tokenized real estate assets—subject to market conditions and regulatory approval.