Coinbase and Better Mortgage Launch Bitcoin-Backed Home Loans

The product utilizes a dual-loan structure to navigate regulatory requirements. One is a standard mortgage compliant with Fannie Mae guidelines, while the second is a separate loan secured by the borrower’s Bitcoin. To qualify, applicants must pledge BTC valued at no less than 250% of the required down payment. Better manages the underwriting and servicing, while Coinbase provides the custodial infrastructure to hold the collateral in Coinbase Prime accounts.

Unlike traditional margin loans, this arrangement protects borrowers from volatility-driven margin calls. Coinbase confirms that price fluctuations do not trigger forced liquidation or alter loan terms. However, the collateral remains at risk if a borrower falls 60 days behind on payments, at which point Better reserves the right to liquidate the assets. The company returns the full amount of pledged Bitcoin only after the entire mortgage is repaid or refinanced.

This financial model aims to assist younger demographics whose wealth is increasingly concentrated in digital assets. By avoiding a sale, borrowers bypass immediate tax consequences associated with disposing of cryptocurrency. Better Mortgage Chief Technology Officer Ziggy Jonsson noted that the offering provides a new path to homeownership for those whose wealth resides onchain. Eligible Coinbase One members can further benefit from a 1% rebate on their mortgage value, capped at $10,000, which applies to both Bitcoin-backed and standard home loan products.