Coinbase and Better Mortgage Launch Bitcoin-Backed Mortgages to Homebuyers
Crypto exchange Coinbase and mortgage lender Better Mortgage have launched a token-backed mortgage product that allows homebuyers to pledge Bitcoin as collateral for a loan that covers their down payment. The product, which is now available to all eligible users, was initially tested with an early-access group in March and saw $260 million in projected loan volume before its general availability on August 26.
The token-backed mortgage pairs a conforming home loan with a separate Bitcoin-secured loan that covers the buyer's cash down payment. The first mortgage follows standard Fannie Mae guidelines, while the second loan is secured by pledged Bitcoin and a second lien on the property. Better Mortgage originates both loans and holds the Bitcoin in its custodial account on Coinbase's platform.
Coinbase One members can receive up to $10,000 in lender credits as part of the program. The product also allows borrowers to pledge Bitcoin valued at 250% of the down-payment loan amount, meaning $100,000 in Bitcoin provides $40,000 toward the down payment.