Coinbase and Better Enable Crypto-Backed Down Payments for Fannie Mae Mortgages

Crypto Holdings Enter Mortgage Pipeline Through Dual-Loan Structure 

TL;DR

• Coinbase and Better launch a structure allowing Bitcoin and USDC to fund mortgage down payments via a separate crypto-backed loan
• FHFA directs Fannie Mae to recognize crypto reserves without liquidation, applying a 50%–60% volatility haircut
• Borrowers face higher costs, with rates up to 1.5 percentage points above standard mortgages

We’ve launched the all-new COIN360 Perp DEX, built for traders who move fast!

Trade 130+ assets with up to 100× leverage, enjoy instant order placement and low-slippage swaps, and earn USDC passive yield while climbing the leaderboard. Your trades deserve more than speed — they deserve mastery.

Coinbase Global and Better Home & Finance introduced a mortgage-linked structure allowing borrowers to use Bitcoin and USDC held on Coinbase to support home purchases without selling their assets, structuring the transaction so the borrower takes out a standard conforming mortgage aligned with Fannie Mae guidelines while simultaneously securing a separate crypto-backed loan that provides the cash required for the down payment.

Federal policy groundwork was established when the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac in June 2025 to prepare for recognizing cryptocurrency as an asset in mortgage risk assessments without requiring conversion into U.S. dollars, replacing earlier practices that required borrowers to liquidate digital holdings and deposit proceeds into regulated bank accounts before qualification.

The combined framework now integrates digital assets into housing finance through two mechanisms, allowing verified crypto holdings to count toward borrower reserves while enabling those same holdings to support a separate financing layer used specifically for down payments, marking a structural shift from prior underwriting models that limited crypto’s role to post-liquidation cash balances.

Borrowers using the structure retain exposure to their digital assets rather than triggering a taxable sale, with Coinbase’s Max Branzburg stating, “A lot of those crypto owners and investors have not been able to become homeowners,” followed by, “We haven’t really had the best way to service that need,” describing a gap the new system aims to address.

The arrangement introduces additional leverage, requiring borrowers to service two loans simultaneously, with reported pricing reaching as much as 1.5 percentage points above standard Fannie-conforming mortgage rates, while pledged crypto cannot be traded during the loan period, according to product disclosures tied to the structure.

Better Chief Executive Vishal Garg stated the structure remains intact even if crypto values decline as long as borrowers continue making payments, while Coinbase disclosures specify that market volatility alone does not trigger margin calls and mortgage terms remain unchanged after origination provided payment obligations are met.

Guidelines governing reserve recognition apply a volatility haircut ranging from 50% to 60%, reducing the usable value of crypto holdings in underwriting calculations, meaning a borrower with $100,000 in Bitcoin may receive credit for only $40,000 to $50,000 in qualifying reserves, and a requirement of $80,000 in reserves could require holding between $160,000 and $200,000 in crypto assets.

Eligibility conditions require assets to be held on U.S.-regulated exchanges and verified through platform integrations, while self-custodied holdings, cold storage wallets, staked assets, and decentralized finance positions remain excluded from automated underwriting assessments under the current framework.

Market context surrounding the rollout includes data showing about 14% of U.S. adults held cryptocurrency in 2025, while nearly 13% of younger homebuyers had already sold digital assets to fund down payments, alongside housing data placing the average U.S. home price above $405,000 during the fourth quarter, with a typical 20% down payment exceeding $80,000.

Parallel lender activity has expanded crypto integration into mortgage underwriting, with Newrez allowing borrowers to use BTC, ETH, crypto exchange-traded funds, and stablecoins as qualifying assets without liquidation, while Rate’s RateFi program permits verified crypto holdings to count toward reserves and, in some cases, income, though both models still require conversion to cash for closing-related payments.

Housing market conditions during the rollout include mortgage applications declining by 10.5% over a one-week period, while the average 30-year fixed mortgage rate rose to 6.43% from 6.30% for loans up to $832,750, with borrower costs also reflecting an increase in points to 0.65.

Tim Ryan, a Coinbase advisory council member and former Ohio representative, stated, “Digital assets have a place for working-class people… all the way down to getting a home,” followed by, “To see the industry move into… the housing sector… is a really huge deal,” as the integration of crypto assets continues to expand within regulated financial infrastructure tied to mortgage underwriting.

This article has been refined and enhanced by ChatGPT.