Coinbase Lets U.S. Homebuyers Use Bitcoin as Collateral for…

Coinbase and Better Mortgage have opened their Bitcoin-backed home loan product to U.S. borrowers, allowing eligible buyers to pledge BTC as collateral for a down payment rather than selling their holdings first. The offering became generally available to Coinbase One members on August 12, following an initial rollout and a waitlist, the companies said.

The structure pairs a conventional Fannie Mae-conforming mortgage with a second loan that supplies the down-payment cash. Borrowers move the pledged Bitcoin into a custodial account controlled by Better through Coinbase Prime, where it remains until the down-payment loan is repaid or refinanced; the assets are then returned subject to the loan terms. Coinbase supplies the crypto infrastructure and custody technology but does not originate or service the mortgages, while Better handles underwriting and stays on as lender and servicer.

Collateral terms

Both loans carry the same interest rate and amortization term and are collected as a single monthly payment. Bitcoin must initially be worth at least 250% of the down-payment loan, meaning a borrower seeking $100,000 toward a $500,000 home would need to pledge roughly $250,000 of BTC. Better describes the same ratio as down-payment credit equal to about 40% of the pledged Bitcoin's value.

A decline in Bitcoin's price does not by itself trigger a margin call. Better says borrowers are not required to add collateral and that market movements alone will not force a liquidation, which can instead follow a 60-day payment delinquency. The arrangement lets long-term holders keep their Bitcoin exposure and sidestep a sale that could generate capital-gains tax, though it adds leverage because the buyer is taking on a second loan rather than making an ordinary cash down payment.

The companies are targeting buyers whose wealth sits in digital assets but who lack cash. Better says 41% of its pre-approved customers satisfy its income and credit requirements but do not have enough cash for a traditional down payment. A waitlist opened in June represented more than $260 million in projected mortgage volume, with 76% of respondents already Coinbase One members and 60% expecting to buy a home within six months. Approved Coinbase One members can also receive a lender credit equal to 1% of their mortgage value, capped at $10,000, applied to closing costs.

The partnership was announced in March and funded its first Bitcoin-backed conforming mortgage before this month's expansion. It differs from Newrez, which counts Bitcoin, Ether, approved spot crypto ETFs and dollar-backed stablecoins when assessing certain borrowers but still requires closing funds to be provided in U.S. dollars.