Bitcoin-Backed Mortgages Go Live: Coinbase and Better Mortgage Partner on Crypto Collateral

A groundbreaking collaboration between Better Mortgage and Coinbase has introduced a bitcoin-backed mortgage option that enables homebuyers to leverage their cryptocurrency holdings as down payment collateral.

The program, which has attracted $360 million in pre-application volume since its public debut, involves two separate loans finalized simultaneously at closing. Borrowers receive a traditional Fannie Mae-conforming home loan secured by the property itself, alongside a secondary down payment loan backed by their bitcoin holdings and an additional property lien.

The collateral requirement stands at 250% of the down payment amount, meaning borrowers must pledge $2.50 in bitcoin for every $1 of down payment. For instance, someone buying a $500,000 property could use $250,000 worth of bitcoin to secure a $100,000 down payment.

Better Mortgage retains the right to rehypothecate pledged bitcoin, potentially using borrowers’ crypto for other business purposes. Borrowers receive a promise to get back an equal quantity of bitcoin upon loan completion, rather than having their specific coins held securely in segregated storage.