Bitcoin-Backed Mortgages Move Closer As Fannie Mae Channel Opens To Crypto Collateral

Americans holding Bitcoin are moving closer to using crypto exposure in the mortgage process without first selling their coins, after Better Home & Finance and Coinbase funded the first Fannie Mae-backed mortgage in the United States backed by Bitcoin.

The product is aimed at qualified borrowers whose wealth is partly held in digital assets rather than cash. Better and Coinbase plan to make the structure available nationwide by summer 2026, with Bitcoin and USDC supported at launch. The companies said additional digital assets may be added as the market matures.

The launch follows a June 2025 order from Federal Housing Finance Agency Director Bill Pulte telling Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for mortgage risk assessment. The directive centered on crypto held on U.S.-regulated centralized exchanges and required the mortgage giants to consider risk adjustments for volatility and reserve exposure.

Fannie Mae’s standard virtual-currency rule still treats crypto differently from cash. For ordinary asset assessment, virtual currency must be exchanged into U.S. dollars, deposited into a regulated U.S. financial institution and verified in dollars before loan closing. The Better-Coinbase structure takes a different route by using pledged crypto as collateral for a separate down-payment loan tied to a conforming Fannie Mae mortgage.

Better And Coinbase Use A Two-Loan Structure

The product does not mean buyers pay sellers directly with Bitcoin. Borrowers receive two loans at closing. The first is a conforming Fannie Mae mortgage on the home. The second funds the down payment and is secured by pledged crypto plus a second lien on the property.

Better’s crypto-backed mortgage page lists Bitcoin and USDC as accepted collateral at launch. It says pledged Bitcoin receives 40% down-payment credit, which implies a 250% collateralization ratio. A borrower pledging $100,000 in Bitcoin would receive $40,000 of down-payment credit, while keeping ownership of the Bitcoin position during the loan term.

The first completed case involved a Michigan couple that used Bitcoin collateral to buy a home, turning the earlier product plan into a live transaction. That closing already gave the mortgage market its first Fannie Mae-backed Bitcoin mortgage example before the wider rollout.

The structure also gives Coinbase a visible role in regulated home-finance infrastructure. Better says pledged assets are held in Better Mortgage’s custodial account on the Coinbase platform. The use of Bitcoin and USDC collateral links the product to a broader institutional custody trend, where regulated firms are also expanding stablecoin and digital-asset custody workflows through products such as USDC custody support at traditional financial institutions.

No Margin Calls, But Borrowers Still Carry Loan Risk

Better’s structure avoids one major risk seen in standard crypto-backed loans. Falling Bitcoin prices alone do not trigger margin calls or require borrowers to add more collateral. The pledged crypto can remain locked for the duration of the down-payment loan and is returned after the loan is fully repaid or refinanced.

The risk trigger is borrower delinquency rather than market volatility. Better says delinquency starts after a missed payment, borrowers have 30 days to bring the account current, and pledged crypto may be liquidated if the borrower remains delinquent for 60 days. Foreclosure proceedings on the home begin separately at 180 days of delinquency under the mortgage framework.

That distinction keeps the product closer to home-finance collateral than a margin loan, but it does not remove credit risk, custody risk, tax considerations or Bitcoin price exposure. Borrowers keep upside if Bitcoin rises, but they also pledge an asset that can remain locked while the mortgage and down-payment loan are outstanding.