Bitcoin-Backed Mortgages Now Open to US Buyers Through Coinbase and Better Mortgage

Bitcoin-backed home financing has moved beyond its waitlist phase, as Coinbase and Better Mortgage announce general availability for their joint product. The unique loan structure pairs a conventional mortgage with a separate downpayment loan secured by pledged Bitcoin and a second lien on the property.

The borrower closes two loans: one for the property itself, and another for the cash down payment. This downpayment loan is secured by the pledged Bitcoin, which remains in the borrower's Coinbase account until it's transferred to Better's custodial account on Coinbase Prime.

Bitcoin is valued at 40% of its market value for collateral purposes, resulting in a high collateralization ratio of 250%. According to an example provided by Better, $250,000 worth of Bitcoin can support a $100,000 downpayment loan. However, it's essential to note that the pledged assets may not be sold or transferred without prior written consent from Better Mortgage.

The partnership between Coinbase and Better Mortgage first announced in March has generated significant interest, with over $260 million projected in loan volume before general availability. Despite its potential benefits, borrowers should be aware of the risks involved, including the possibility of liquidation if they default on the downpayment loan.