Better Mortgage Unveils Bitcoin-Backed Mortgage Product in Partnership with Coinbase
Better Mortgage has partnered with Coinbase to launch a token-backed conforming mortgage product that allows homebuyers to use Bitcoin as collateral for part of their down payment.
The mortgage product is available now, and interested borrowers can start an application on Better's website. The loan structure does not directly tie the primary mortgage to Bitcoin; instead, it involves two separate loans: a standard first mortgage conforming to Fannie Mae guidelines, and a secondary loan that provides the down payment.
The second loan is secured by pledged Bitcoin and a second lien on the property. In this setup, 40% of the Bitcoin's value can be used as collateral for the down-payment loan, with $250,000 worth of BTC supporting a $100,000 loan under Better's current product terms.
The Bitcoin is held in Better Mortgage's custodial account on Coinbase Prime, and borrowers are prohibited from selling or transferring it without prior written consent during the pledge period. This means that while borrowers retain economic exposure to their Bitcoin, they give up control and liquidity over it.