Coinbase teams up with Better to launch crypto-backed home loans, allowing you to pay your down payment without selling Bitcoin.

This is the most materially meaningful step for crypto assets to enter the traditional financial mortgage collateral system.

Author: The Defiant

Compiled by: Deep Tide TechFlow

Deep Tide Editorial Note: 52 million U.S. adults hold digital assets, yet have been unable to use those assets in traditional mortgage applications—this product changes that.

Bitcoin or USDC can be used directly as down payment collateral, without selling coins, without triggering a tax event, and with Fannie Mae backing. The interest rate is the same as a standard compliant mortgage. This is the most materially meaningful step for crypto assets to enter the traditional financial mortgage collateral system.

Full text below:

Coinbase and Better Home & Finance announced their partnership on Thursday to launch a token-backed mortgage product. The product is intended to widen pathways to homeownership and receive Fannie Mae backing, just like other compliant mortgage loans.

Eligible Americans can now stake Bitcoin or USDC as collateral to pay for a cash down payment, thereby obtaining a standard compliant mortgage loan—without selling digital assets and without triggering a taxable event.

How it works

Borrowers don’t have to raise cash for the down payment. Instead, they pledge their crypto assets as collateral for a separate loan that covers the down payment. At closing, there are two loans: one is a standard Fannie Mae mortgage loan for the property, and the other is a second loan secured by the pledged crypto assets. Both loans share the same interest rate and repayment term. Borrowers only need to manage a single combined monthly payment—both companies say this is a market first.

These mortgages are designed according to Fannie Mae guidelines, with the structure as a standard conforming loan. The two companies say this will make the interest rate significantly lower than the level of traditional token-backed loans.

No margin calls

If the value of Bitcoin drops, the mortgage terms remain unchanged and no additional collateral is required. Only market volatility won’t trigger liquidation. The situations in which the collateral faces liquidation risk are limited to cases where the borrower is 60 days past due on repayment—handled the same way as compliant mortgage loans.

For borrowers pledging USDC, the collateral can earn rewards, helping offset part of the mortgage repayment and thereby lowering the effective net interest rate.

Coinbase One members who successfully close a crypto-backed mortgage or a conventional mortgage through Better can receive a rebate equal to 1% of the mortgage amount, capped at $10,000, to cover closing costs.

Why it matters

For decades, the path for Americans to move toward homeownership has required selling assets, liquidating investments, or withdrawing retirement savings to fund a cash down payment—often triggering capital gains taxes or early-withdrawal penalties. Market reports show that about 52 million American adults—roughly 20% of the adult population—have held digital assets.

Before this, if borrowers didn’t liquidate digital assets first, they couldn’t receive credit recognition for those assets in traditional mortgage underwriting and approval processes. Crypto-backed mortgages change that—turning on-chain wealth into real-world homeownership opportunities while also broadening access to home buying, even as investors retain their long-term positions.

Better CEO Vishal Garg said this partnership “opens a new path to the American Dream for 52 million Americans who hold digital assets.”

The two companies plan to expand the types of collateral they can accept over time, including tokenized stocks, fixed-income products, and other tokenized real estate assets, depending on market and regulatory conditions.