Bitcoin-Backed Mortgages Launch in US, Generation $360M in Loan Applications

Bitcoin-backed home loans have launched in the US, thanks to a partnership between Better Mortgage and Coinbase. The program allows homebuyers to use their Bitcoin holdings as collateral for down payments, with a 250% collateral ratio required. This means that if someone is buying a $500,000 property, they would need to pledge $125,000 worth of Bitcoin to secure a $100,000 down payment.

The loans are offered through Coinbase One and have already generated $360 million in loan application volume since becoming publicly available last week. The program involves two separate loans that close simultaneously: a conventional Fannie Mae-conforming mortgage with the property as security, and a secondary loan covering the down payment, secured by the borrower's Bitcoin holdings and a subordinate lien on the residence.

Borrowers must pledge their Bitcoin to Better Mortgage, which retains the right to rehypothecate the collateral. This means that the lender can use the pledged assets for alternative purposes while maintaining an obligation to return an equivalent amount of Bitcoin at loan termination.