Better, Coinbase Launch Crypto-backed Conforming Mortgage Product

Better Home & Finance Holding Co., the parent of digital lender Better.com, and Coinbase have launched a token-backed product that allows qualified borrowers to pledge Bitcoin or USDC as collateral for a conforming mortgage down payment, without selling their digital assets.

The product, announced Thursday, is originated and serviced by Better, with Coinbase providing digital asset custody. The structure keeps the first-lien mortgage inside the conventional, Fannie Mae-eligible box while moving crypto exposure into a separate, privately financed loan secured by pledged tokens. If the model scales and gains investor acceptance, it could create a new down payment channel.

The companies are positioning the product toward Americans who hold digital assets but lack sufficient liquid cash for a traditional down payment, a profile increasingly common among younger buyers.

Vishal Garg, CEO and founder of Better, said that 52 million Americans own digital assets and, together, the companies “are taking a major step towards truly democratizing homeownership for hardworking Americans.” 

Max Branzburg, head of consumer and business products at Coinbase, added: “Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional downpayment.”

Designed to be priced like other conforming mortgage loans

Under the structure described by the companies, borrowers who meet Better’s mortgage underwriting standards may pledge Bitcoin or USDC instead of bringing a traditional cash down payment. The crypto pledge serves as substitute collateral for the down payment while the first-lien mortgage remains a standard Fannie Mae-eligible conforming loan.

The product is designed to be priced like other conforming mortgage loans, according to the announcement, rather than carrying the higher interest rates often associated with standalone crypto-backed loans.  

The companies say the structure is intended to avoid forcing borrowers to liquidate tokenized assets and potentially trigger capital gains taxes or early withdrawal penalties. Interested borrowers may sign up for early access at Better’s website.

According to the companies, if the value of the crypto falls, the first-lien mortgage terms do not change and the borrower is not required to post additional collateral. The pledged crypto is only at risk of liquidation in the event of a 60-day mortgage payment delinquency. 

There’s the possibility of earning rewards when pledging USDC and borrowers may be able to pledge specific quantities or specific token types. Also, Coinbase One members who close a mortgage through Better will be eligible for a rebate equal to 1% of the mortgage amount, capped at $10,000, to help cover closing costs and fees. All rebates are paid by Better.

Better and Coinbase also plan to expand eligible collateral types over time to include tokenized equities, fixed income and other tokenized real estate assets, if market and regulatory conditions allow.

Flávia Furlan Nunes reported and wrote this article with drafting assistance from HousingWire Automation, an editorial tool that helps transform announcements and industry data into HousingWire-style news coverage.