Coinbase, Better roll out bitcoin mortgages after $260M waitlist

Coinbase and Better made a bitcoin-backed mortgage product generally available on Aug. 26 that lets qualified buyers pledge bitcoin to secure a separate loan for the cash down payment while keeping the primary mortgage a Fannie Mae conforming loan. Better Mortgage will originate the conforming first lien and the bitcoin-secured second loan, and pledged bitcoin will be held in Better’s custodial account on Coinbase’s platform.

The two companies wrote that the product will be “originated and serviced by Better, powered by Coinbase, and designed in accordance with guidelines from Fannie Mae, making the first lien a standard, conforming mortgage.” Better’s chief technology officer Ziggy Jonsson described the effort as expanding access to homeownership by meeting borrowers where they are.

Eligible Coinbase One members gained access beginning Aug. 12 and the offering opened to the general public on Aug. 26. Approved Coinbase One members can receive a Better-funded lender credit equal to 1% of eligible mortgage, refinance or HELOC balances, capped at $10,000.

Under the structure, a separate loan secured by pledged bitcoin funds the down payment and creates a second lien on the property; bitcoin does not flow into the conforming mortgage. Fannie Mae typically requires virtual currency used for down payment, closing costs or reserves to be converted to U.S. dollars before closing. The separate crypto-secured loan allows the conforming first lien to follow those rules without treating unconverted bitcoin as the mortgage’s direct source of funds.

At launch the program accepts bitcoin as collateral and requires borrowers to pledge roughly 250% of the down-payment loan amount in bitcoin. For example, $100,000 in bitcoin collateral would support about $40,000 toward a down payment under that ratio. Better says market price swings alone will not trigger margin calls or automatic liquidations; however, the lender may sell pledged assets after 60 days of payment delinquency.

The companies reported the waitlist projected more than $260 million in loan demand before general availability, that 76% of respondents were Coinbase One subscribers, and that 60% planned to buy a home within six months. The product was first described in March with plans to accept bitcoin or USDC; current terms identify bitcoin as the accepted collateral at launch. Other crypto-backed lending products can include price-triggered liquidations or different term structures; custody arrangements, interest charges and default provisions vary by lender and remain factors for prospective borrowers.