Coinbase and Better Mortgage have made a Bitcoin-backed mortgage product generally available to qualified US homebuyers, allowing them to secure a down payment loan without selling their BTC.
Bitcoin-Backed Home Loans Use a Two-Loan Structure
Better Mortgage and Coinbase announced the rollout on Aug. 26, opening the product after testing it with a limited group of borrowers. Better originates and services the loans, while Coinbase provides the infrastructure used to transfer and hold the Bitcoin collateral. Rather than creating one mortgage secured partly by a home and partly by cryptocurrency, the companies have divided the financing into two loans. One is a standard first-lien mortgage designed to meet Fannie Mae's conforming guidelines. A separate loan, secured by the borrower's Bitcoin, supplies the cash needed for the down payment.
To qualify, applicants must pledge BTC worth at least 250% of the loan down payment. Someone seeking $100,000 for a down payment would need to provide Bitcoin valued at no less than $250,000 when the collateral is posted. This innovative lending product follows the broader trend of institutional Bitcoin adoption, including BlackRock lowering its IBIT swap minimum to expand access.
Bitcoin Price Declines Do Not Cause Margin Calls
Unlike many crypto-backed loans, the Better product does not require borrowers to add collateral merely because Bitcoin loses value. Coinbase states that day-to-day price movements will not change the mortgage terms or produce a margin call. Payment failures carry a different consequence. Under the product terms, Better can liquidate the pledged Bitcoin once a borrower becomes 60 days delinquent on the loan payments. A borrower therefore retains exposure to possible Bitcoin gains but also places the pledged holdings at risk if payments stop.
The two-loan structure also means the homebuyer takes on debt for the down payment instead of contributing cash at closing. Selling Bitcoin to fund a home purchase can create US tax consequences because the IRS treats digital assets as property. Pledging BTC as collateral does not involve an immediate sale, although any later liquidation could have tax consequences. This product aligns with the growing institutional confidence in Bitcoin, as reflected in the Bernstein $150K Bitcoin price forecast.
Coinbase One Members Can Receive Up to $10,000
Coinbase One members approved for eligible Better financing can receive a rebate equal to 1% of the mortgage value, capped at $10,000. Better pays the rebate as a lender credit against closing costs. The companies have extended the offer beyond Bitcoin-backed mortgages to Better's standard mortgages, home equity lines of credit and refinancing products. Better said 76% of people on the June waitlist were already Coinbase One members, while 60% planned to buy a home within six months. Responses indicated more than $260 million in projected loan volume before general availability.
Better Mortgage's chief technology officer Ziggy Jonsson linked the product to changes in how some younger Americans hold their wealth. By allowing Coinbase One members to pledge crypto as collateral without selling their holdings, the companies are opening a new path toward homeownership for a generation of borrowers whose wealth increasingly lives onchain. In June, the companies funded the first Fannie Mae-backed US mortgage using Bitcoin as collateral for a couple in Ann Arbor, Michigan.
