Coinbase and Better Close First Fannie Mae-Backed Mortgage Using Bitcoin as Down-Payment Collateral

Coinbase and mortgage lender Better said they have completed what they describe as the first government-guaranteed mortgage that uses Bitcoin as collateral. A Michigan couple pledged Bitcoin to support their down payment and secured a Fannie Mae-backed home loan. Coinbase announced the transaction Thursday and said it plans to expand the offering to qualified borrowers nationwide in the coming months. How the structure works Rather than selling crypto to raise cash, borrowers pledge digital assets held on Coinbase as collateral. Coinbase initially supports Bitcoin and Circle's USDC. The approach is designed to help borrowers avoid triggering capital gains taxes while keeping exposure to potential future appreciation. Better says the setup involves two loans: a standard Fannie Mae-conforming mortgage that meets federal requirements, plus a second lien tied to the pledged crypto. In one illustration, a buyer covering a $100,000 down payment could place a second lien and pledge $250,000 in Bitcoin. Better says it may liquidate the pledged crypto if the borrower becomes 60 days delinquent. Better also says the product differs from margin-style crypto loans, arguing that price swings do not trigger automatic liquidations and that "price volatility has absolutely no impact." Why it matters Traditional mortgage underwriting has generally treated crypto as too volatile for down-payment purposes, typically recognizing cash and certain securities instead. Using exchange-held digital assets to secure a down payment creates a new link between crypto wealth and conventional mortgage financing. Coinbase Head of Consumer and Platform Partnerships Mark Troianovski said the change could broaden access for "tens of millions" of Americans who have built wealth in digital assets. Regulatory and industry backdrop The move follows guidance from Federal Housing Finance Agency (FHFA) Director Bill Pulte, who has urged the agency to align more closely with a pro-crypto agenda. The FHFA has specified that only digital assets held on centralized platforms, not self-custodial wallets, are eligible for consideration in mortgage underwriting. Other lenders have signaled similar steps. In January, wholesale lender Newrez said it would begin recognizing Bitcoin and Ethereum for certain non-agency mortgage products, applying steep discounts to crypto holdings. Pulte highlighted that announcement on X with an "it begins" post. Pushback and risks Critics have raised concerns about consumer and systemic risk. Sen. Elizabeth Warren warned that incorporating crypto into mortgage underwriting could introduce "unnecessary risks to consumers" and threaten the safety and soundness of U.S. housing and financial markets. Risks cited include sharp crypto price moves, second-lien liquidation after delinquency, and dependence on centralized custodians. What's next Coinbase first disclosed the initiative in March. The company says it will roll out the offering to qualified borrowers across the U.S. in the coming months, initially supporting Bitcoin and USDC. Lenders and regulators are expected to monitor closely as the structure is tested in the market.