Better and Coinbase Fund First Fannie Mae-Backed Bitcoin Mortgage in U.S. History
A married couple in Ann Arbor, Michigan just made history without any fanfare. On June 4, Joe and Amy closed on a home using Bitcoin as collateral for their down payment — marking the first time a government-sponsored enterprise has backed a crypto-secured mortgage.
Better Home & Finance Holding Co. and Coinbase have funded what the companies say is the first Fannie Mae-backed mortgage in the United States that uses bitcoin as collateral for the borrower’s down payment loan. The transaction closed on June 4, 2026, and was publicly confirmed on June 5.
How the Bitcoin Mortgage Works
The product does not turn Bitcoin into a direct home loan. Instead, it works through a structured collateral arrangement. Borrowers pledge Bitcoin or USDC held at Coinbase as security for a portion of their down payment. Better underwrites the mortgage using standard Fannie Mae guidelines, with Coinbase serving as the custodian of the pledged crypto assets.
If the value of the crypto collateral drops, borrowers can either add more crypto to maintain the required collateralization ratio or make a cash payment. If they fail to do so, Coinbase can liquidate a portion of the pledged crypto to bring the position back within acceptable parameters.
Better and Coinbase said the product is available to qualified borrowers nationwide. The minimum down payment is 3%, though borrowers using crypto collateral must typically put down at least 5% to account for volatility risk.
“This is the bridge between the digital asset economy and the physical world of homeownership,” said Better CEO Vishal Garg in a statement. “Millions of Americans hold significant wealth in crypto but struggle to access traditional credit products. This product solves that problem by letting their bitcoin work for them rather than sitting in a wallet.”
Fannie Mae’s Role Is Significant
The involvement of Fannie Mae is the crucial detail. As a government-sponsored enterprise, Fannie Mae’s willingness to purchase loans backed by crypto collateral signals a major shift in how the mortgage industry views digital assets.
Fannie Mae does not directly originate or service loans. Instead, it buys mortgages from lenders like Better, packages them into mortgage-backed securities, and guarantees them to investors. By agreeing to purchase the crypto-collateralized loans, Fannie Mae has essentially validated the underwriting model.
“Fannie Mae’s involvement is the real story here,” said a mortgage industry analyst who asked not to be named. “A GSE touching anything crypto-related was unthinkable three years ago. The fact that they’re buying these loans means they’ve signed off on the risk model. That opens the door for every other lender in America to follow suit.”
Coinbase’s Strategic Move
For Coinbase, the mortgage product represents an expansion beyond its core exchange business into financial services. The company is effectively operating in the background of a Fannie Mae-backed product, custodying the Bitcoin and USDC that borrowers pledge as collateral.
Coinbase does not lend on its own balance sheet. Instead, it charges custody and servicing fees, creating a recurring revenue stream that is uncorrelated with trading volumes — a metric the company has been working to diversify.
“This partnership fundamentally changes the utility of Bitcoin as an asset class,” said a Coinbase spokesperson. “Your bitcoin shouldn’t just sit there hoping the price goes up. It should be able to work for you, helping you achieve real-world goals like buying a home.”
The Borrower Experience
Joe and Amy — who asked that their last names not be used for privacy reasons — said the process took roughly 45 days from application to closing. They declined to disclose the purchase price or the amount of Bitcoin posted as collateral but confirmed that they used a combination of BTC and USDC for their down payment.
“It felt like the natural next step,” Joe told HousingWire in an interview. “We’ve been in crypto for years. Why should we have to sell our Bitcoin, pay capital gains tax, and then use the proceeds for a down payment when we can just borrow against what we already hold?”
Implications for the Housing Market
The product arrives at a moment when the U.S. housing market is under significant pressure. Mortgage rates remain elevated above 6.5%, and home prices continue to climb in most major metropolitan areas. For many would-be buyers, the down payment remains the single largest barrier to entry.
A 2025 survey by the Federal Reserve found that roughly 26% of non-homeowners aged 25 to 40 held some form of crypto assets. Better and Coinbase are betting that a significant portion of that group would prefer to keep their crypto exposure while entering the housing market.
Risks and Concerns
Not everyone is celebrating the development. Consumer advocates have raised concerns about putting homeownership at risk from crypto market volatility. If Bitcoin were to experience another severe drawdown — like the 70% crash from its November 2021 peak to the November 2022 low — borrowers could face margin calls at the worst possible time.
“Linking the most volatile asset class in modern finance to someone’s primary residence is a recipe for disaster,” said a consumer protection attorney who specializes in mortgage lending. “Imagine getting a margin call on your down payment collateral right after you lose your job in a recession. That’s the nightmare scenario.”
Better and Coinbase say they have stress-tested the product across multiple bear market scenarios, including a 50% drop in Bitcoin’s price, and maintain that the collateralization requirements are set conservatively enough to protect both borrowers and lenders.
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FAQ
Do I need to sell my Bitcoin to use this mortgage? No. You pledge Bitcoin as collateral while retaining ownership. If you repay the loan, your Bitcoin is returned. If you default, Coinbase can liquidate the pledged crypto.
What happens if Bitcoin’s price crashes? If the value of your collateral drops below the required ratio, you can add more crypto or make a cash payment. If you don’t act, Coinbase can liquidate a portion of the crypto to protect the loan.
Is this available nationwide? Yes. Better and Coinbase say the product is available to qualified borrowers across all 50 states.
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