Coinbase (COIN) and Better Home & Finance (BETR) announced the launch of the first token-backed conforming mortgage, backed by Fannie Mae. Borrowers can pledge bitcoin or USDC as collateral for a down payment on a house — and do it without selling a single coin. The mortgage structure involves two loans at closing: a standard Fannie Mae mortgage on the home and a second loan to fund the down payment, secured by pledged crypto (USDC is a stablecoin pegged to the U.S. dollar). Both loans carry the same interest rate and amortization schedule, combining into a single monthly payment.
The borrower never has to sell their crypto, never triggers a capital-gains tax event, and keeps any yield rewards on USDC holdings. And fluctuations in the price of bitcoin wouldn’t change the terms of the loan. The interest rate is higher than a typical mortgage, with borrowers paying between half a point and 1.5 percentage points above a standard 30-year mortgage, depending on their profile. That premium above the norm is simply the cost of preserving liquidity.
Roughly 52 million American adults own digital assets. Among Gen Z and millennial homebuyers, 12.7% have already sold crypto to fund a down payment, compared with 3.5% of Gen X. Better’s CEO Vishal Garg said, “We have now finally created the infrastructure rails to enable any tokenized asset in America to be able to be pledged to help someone afford to buy a home.” That means demand will get a boost as more buyers enter the market, which could cause house values to rise if this catches on.
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