Crypto exchange Coinbase and mortgage lender Better Home & Finance have introduced a mortgage structure enabling borrowers to use digital assets held in Coinbase accounts as collateral for down payments. This allows qualified buyers to pledge Bitcoin (BTC) or USDC as collateral for a separate loan to fund the down payment, while the primary mortgage remains a standard, Fannie Mae-backed loan.
This innovation could signify a shift in how crypto assets are utilized in U.S. housing finance, transitioning them from qualifying assets in underwriting to a more direct component of mortgage financing. Recent regulatory signals, including the U.S. Federal Housing Finance Agency’s directive to recognize crypto as an asset in mortgage risk assessments, have paved the way for this development.
However, the model introduces constraints. Borrowers cannot trade the pledged assets while they are locked, though market volatility does not trigger margin calls as long as payments are made. Former Ohio Representative Tim Ryan, a member of Coinbase’s advisory council, sees this as a practical use case for crypto, arguing it can help early investors unlock wealth and address homeownership challenges like down payments.
Affordability remains a major issue for U.S. homebuyers, with the average home price exceeding $405,000 in the fourth quarter. A 20% down payment would still cost buyers over $80,000, a barrier that could be less daunting for crypto investors.