Better Home & Finance and Coinbase are funding the first Bitcoin-backed Fannie Mae-backed mortgage and plan to roll out the product to eligible borrowers nationwide by this summer.
Better Home & Finance and Coinbase have funded the first Bitcoin-backed Fannie Mae-backed mortgage in the United States, the companies announced last week, with plans to make the product available to qualified borrowers nationwide by this summer.
The loan was closed on behalf of a couple in their early 30s, a software engineer and a graduate student, living in Ann Arbor, Michigan. The couple had accumulated significant savings in Bitcoin, but lacked the cash for a traditional down payment.
Rather than liquidate their holdings and incur capital gains taxes, they pledged their cryptocurrencies as collateral to complete the home purchase. Better declined to disclose the amount of the loan or the value of the Bitcoin used as collateral.
“It was always our goal to buy our first home, but we weren’t willing to give up 10 years of investment to get there,” said Joe, Better’s first token-backed mortgage customer. His last name was not disclosed in the press release. “With this mortgage, we didn’t have to make a choice. We could close on the house and the Bitcoin would remain.”
Better says the product launch is aimed squarely at a mismatch it consistently sees in its pipeline. The company says 41 percent of its pre-approved customers have income and credit qualifications but don’t have the cash for a down payment.
Meanwhile, the median age of first-time homebuyers will hit an all-time high of 40 in 2025, as high mortgage rates, soaring prices and low inventory push traditional homeowners further into middle age, according to the National Association of Realtors.
“A direct path to homeownership”
The product initially supports Bitcoin and USDC as collateral, but plans to expand to additional digital assets. Coinbase handles the custody and compliance infrastructure on the backend. Better CEO Vishal Garg positioned the product as a structural fix rather than something new.
“The 30-year fixed mortgage was designed for a generation that put their savings in bank accounts and built equity through a single employer,” Garg said. “That is not the economic reality for millions of qualified buyers who are building real wealth in digital assets today.”
Mr. Better’s pitch for Fannie Mae almost certainly reflected on Coinbase’s compliance and custody infrastructure. According to the announcement, the exchange serves more than 150 government agencies and more than 300 institutional customers. This is a meaningful footnote for a product that needed GSE’s blessing to exist.
“Tens of millions of Americans have built real wealth with digital assets,” said Mark Troianowski, head of consumer and platform partnerships at Coinbase. “That wealth will now be directly linked to homeownership, creating new opportunities for the next generation of homebuyers.”
For real estate agents who work with young buyers in the tech industry who have amassed cryptocurrencies over the past decade, this product is worth tracking, if only to understand when it applies to asset-rich but cash-strapped clients.
Bitcoin had its worst week since FTX
Bitcoin fell below $60,000 last Friday, marking its worst week since the collapse of Sam Bankman Fried’s FTX exchange in November 2022.
The immediate cause is that the market is reassessing the outlook for interest rates. Strong U.S. jobs numbers and unresolved tensions between the U.S. and Iran have shifted some markets’ expectations for the Fed from a rate cut to a potential rate hike.
Rising borrowing costs will drive capital out of speculative assets first, and cryptocurrencies will always be the most affected by price revaluations.
The current correction remains modest by historical standards. Bitcoin has fallen about 50% since its peak. Previous crypto bear markets have seen drawdowns of around 80%.
Bitcoin took more than a year to find its bottom after its 2021 high, and another 15 months to regain its highs.
The timing is notable for Better, Coinbase, and their Bitcoin-backed mortgage products. This product is built on assumptions that make intuitive sense in bull markets. This means that even Bitcoin holders who don’t want to realize capital gains can access home ownership.
However, the prospect of a 50% drawdown and higher drawdowns will test that assumption. If the value of the collateral declines rapidly, the borrower faces margin call dynamics that don’t exist with traditional mortgages.
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