Coinbase & Better: Use BTC or USDC for Mortgage Down Payments

• Coinbase and Better Home & Finance have introduced a mortgage structure allowing borrowers to use Bitcoin (BTC) or USDC as collateral for down payments.
• The primary mortgage remains a standard, Fannie Mae-backed loan, while the crypto serves as security for a separate down payment loan.
• Borrowers are protected from margin calls triggered by market volatility, provided they maintain their scheduled mortgage payments.

A New Framework for Digital Assets in Housing

Coinbase Global has partnered with Better Home & Finance to bridge the gap between digital wealth and traditional real estate. Under this new structure, qualified borrowers can pledge crypto assets held in Coinbase accounts to cover the cash required for a down payment. Better will act as the originator and servicer for these mortgages, ensuring they adhere to Fannie Mae guidelines for conforming loans.

This setup allows homebuyers to retain their exposure to digital assets like Bitcoin or USDC instead of liquidating them. However, it replaces an upfront cash payment with additional debt secured by the locked crypto. While the assets are pledged, borrowers are restricted from trading the collateral.

Regulatory Landscape and Industry Adoption

The launch follows a series of regulatory shifts in the United States. In June, the Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie Mac to develop proposals for recognizing cryptocurrency in risk assessments without forcing a conversion to fiat currency. This move signaled a growing acceptance of digital assets within the federal mortgage framework.

Other industry players have also made strides in this space:

• On January 17, the loan servicer Newrez announced it would accept BTC, Ether (ETH), and crypto ETFs as qualifying assets during underwriting.
• On February 23, the lender Rate launched RateFi, allowing crypto holdings to count toward reserves and income, though cash was still required for the final closing costs.

Impact on Market Affordability

Addressing the financial hurdles of homeownership is a core focus of this initiative. Tim Ryan, a member of the Coinbase advisory council and former Ohio Representative, noted that digital assets provide a practical way to unlock wealth for the working class. He argued that crypto can directly address the "down payment barrier," which remains one of the largest obstacles for first-time buyers.

With average US home prices surpassing $405,000 in the fourth quarter, a standard 20% down payment would require more than $80,000 in liquid cash. By utilizing crypto-backed loans for these upfront costs, investors can transition into homeownership without sacrificing their long-term digital asset positions. While market price swings do not affect the primary mortgage terms, they remain a factor in the borrower's overall financial risk profile.