Coinbase and Better launch mortgages using crypto for down payments

Coinbase Global and Better Home & Finance launched a U.S. mortgage structure that allows qualified borrowers to pledge cryptocurrency held in Coinbase accounts as collateral for separate down payment loans. The primary mortgage is a standard conforming loan designed to meet Fannie Mae guidelines and is originated and serviced by Better.

Under the setup, a borrower secures a regular conforming mortgage while a second loan, backed by digital assets, funds the down payment. According to the Coinbase review, the pledged crypto remains in the customer’s Coinbase account but is locked for the duration of the down payment loan. Trading of the pledged assets is restricted while the collateral is locked.

The firms outline that market volatility alone does not trigger margin calls on the down payment loan as long as payments remain current. Once the mortgage is active, its terms do not change. The structure replaces upfront cash with additional debt, allowing borrowers to keep exposure to their digital assets while meeting down payment requirements.

Eligible collateral includes widely held tokens such as Bitcoin and the USDC stablecoin. The down payment financing is distinct from the primary mortgage and is secured by the pledged crypto.

The launch addresses a persistent obstacle in U.S. housing: large down payments. In the fourth quarter, the average home price exceeded $405,000, and a 20% down payment would be more than $80,000.

Housing regulators and lenders have been moving to incorporate digital assets into mortgage processes. In June, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to develop proposals to recognize cryptocurrency as an asset in mortgage risk assessments without requiring conversion to dollars. On Jan. 17, loan servicer Newrez began allowing Bitcoin, Ether, crypto exchange-traded funds and stablecoins to count as qualifying assets in underwriting without liquidation. On Feb. 23, Rate launched a program allowing verified crypto holdings to be considered for reserves and, in some cases, income, while still requiring cash for down payments and closing costs.

Tim Ryan, a former U.S. representative from Ohio who sits on Coinbase’s advisory council, framed mortgage financing as a practical use for digital assets. “Digital assets have a place for working-class people, all the way down to getting a home,” he noted, calling the expansion into housing “a really huge deal.”

Coinbase points out that the crypto pledge introduces new considerations. Price swings in the pledged assets do not alter mortgage terms or trigger margin calls by themselves, but they can affect a borrower’s overall financial position. Borrowers keep exposure to the assets’ performance while managing the added debt from the down payment loan and the requirement to keep collateral locked.