NEW YORK, March 26 — Crypto-backed collateral is being introduced into the U.S. mortgage market through a structure linked to conforming loans eligible for purchase by Fannie Mae, as Better Home & Finance Holding Co. and Coinbase Global Inc. launch a product allowing borrowers to fund down payments without selling digital assets, according to a Bloomberg report.
The offering enables homebuyers to pledge Bitcoin and USDC as collateral for a separate loan used to finance the down payment on a conforming mortgage originated under Fannie Mae guidelines. The primary mortgage remains a standard conforming loan, while the collateralized loan is layered alongside it at closing.
Structure connects crypto collateral to conforming mortgages
Under the structure, borrowers take out two loans simultaneously: a traditional mortgage and a second loan secured by pledged digital assets. Both loans carry the same interest rate and amortization schedule, resulting in a single combined monthly payment, according to the companies.
The conforming mortgage is originated and serviced by Better in line with Fannie Mae requirements, according to the companies, which typically provide standardized underwriting and access to lower borrowing costs through the government-backed secondary mortgage market.
Fannie Mae, overseen by the Federal Housing Finance Agency, plays a central role in U.S. housing finance by purchasing and guaranteeing conforming loans.
Collateral not subject to price-triggered liquidation
According to the companies, the loan terms are not affected by changes in cryptocurrency prices. The pledged assets are only at risk of liquidation if the borrower becomes delinquent on loan payments.
The structure allows borrowers to retain exposure to digital assets rather than selling holdings to raise cash for a down payment, which can trigger capital gains tax in some jurisdictions and forgo potential future upside.
At closing, borrowers effectively replace a cash down payment with a financed amount backed by crypto collateral, paying interest on both the mortgage and the collateralized loan.
Product extends crypto use into housing finance
Crypto-backed lending structures have existed in private markets, but the linkage to Fannie Mae–eligible mortgages connects digital assets to a core segment of U.S. financial infrastructure.
The launch follows earlier policy signals from the Federal Housing Finance Agency indicating openness to considering crypto assets held on regulated platforms within mortgage risk assessments.
Company executives framed the product as a way to extend the use of digital assets beyond trading and investment into consumer financial applications tied to real-world assets.
