Coinbase and Better Close First Bitcoin-Backed Home Loan Deal

TLDR

• Coinbase and Better funded the first bitcoin-backed mortgage in the U.S. market.
• The mortgage combines a Fannie Mae loan with a crypto-backed down payment loan.
• Borrowers can use bitcoin or USDC without selling their digital assets.
• The first loan helped a Michigan couple buy a home using crypto collateral.
• Bitcoin-backed loans require a 2.5-to-1 collateral ratio for approval.

Coinbase and Better Home & Finance have funded a mortgage using bitcoin as collateral. The companies completed the first loan and confirmed plans for a nationwide rollout by summer. The product allows borrowers to access home financing without selling digital assets.

Coinbase Mortgage Structure Combines Crypto and Traditional Loans

The structure uses two loans that close at the same time. One loan follows standard Fannie Mae conforming mortgage rules. The second loan uses Bitcoin or USDC to fund the down payment.

Both loans share the same rate and repayment schedule for borrowers. As a result, users make one combined monthly payment instead of separate payments.

For example, a $500,000 home may involve a $400,000 mortgage. The borrower then secures a $100,000 crypto-backed loan for the down payment.

To support that loan, borrowers must pledge more crypto than the loan value. Bitcoin loans require about a 2.5-to-1 collateral ratio, while USDC requires 1.25-to-1.

The pledged crypto remains in custody through Better’s account on Coinbase. It stays locked for the full duration of the loan term.

The product offers both 15-year and 30-year fixed-rate options. Loan limits follow Fannie Mae standards, which vary by region.

First Borrower Case Highlights Demand for Crypto-backed Home Financing

Coinbase and Better completed the first loan for a couple in Michigan. The borrowers used bitcoin holdings instead of selling assets for a down payment.

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They avoided capital gains taxes and retained exposure to future bitcoin price movements. This structure helped them purchase a home without liquidating savings.

Mark Troianovski from Coinbase explained the product’s goal in a statement. He said bitcoin should serve practical uses beyond storage in digital wallets.

Better reported strong early demand before the planned nationwide release. The waitlist represents about $250 million in potential loan volume.

More than half of interested borrowers aim to purchase homes within six months. Around 76% of applicants already hold accounts with Coinbase.

California, New York, and Florida show the highest interest among applicants. Better also stated that 41% of pre-approved clients lack enough cash for down payments.

The companies expect to expand supported digital assets over time. They plan to maintain the current structure while adding more eligible collateral options.