Crypto-Backed Mortgages Allow Borrowers to Pledge Bitcoin and USDC as Collateral

Better and Coinbase have introduced a mortgage product that allows borrowers to pledge cryptocurrencies like Bitcoin and USDC as collateral for a conforming first-lien mortgage.

The loan is written to Fannie Mae's guidelines, and a separate privately financed loan funds the cash down payment, secured by the tokens and a second lien on the house.

The product is designed for borrowers who are short of cash rather than money, with collateral ratios that require 250% of the down payment amount in BTC or 125% in USDC.

Better's CEO Vishal Garg said that the product is a coherent design and expects it to be the route by which 'digital assets make their way into the banking system.'