Better and Coinbase have closed the first Fannie Mae-supported mortgage
The companies also confirmed plans to make the product available to qualified borrowers nationwide by this summer. Interested customers can currently apply to a waitlist, which has a projected $250 million in loan volume, a Better spokesperson told National Mortgage News.
The first loan was closed by a married couple in their early 30s from Ann Arbor, Michigan. The two had built significant savings in digital assets but lacked the cash needed for a traditional down payment. Rather than liquidating their long-term Bitcoin position, assuming capital gains taxes and potentially losing out on future profits, the couple used crypto as collateral to buy their first home, according to the release.
The collateral is held in a Coinbase custody account and sized to cover the crypto-backed loan in full, with a buffer built in for price movement.
Bitcoin price volatility also has no impact on the primary mortgage or its conforming status, Better said. The first lien remains a standard Fannie Mae mortgage regardless of market conditions, as the crypto-backed loan is a separate, second lien. And even if Bitcoin's value drops significantly, borrowers do not have to pledge additional assets, as the collateral structure is one-and-done at origination, the spokesperson said.
The loan was originated and serviced by Better, while the Bitcoin pledge was powered by Coinbase. Better chose to partner with Coinbase because it had the security, compliance and operational rigor needed to bring a first-of-its-kind product to market responsibly. Coinbase also serves as the digital asset and infrastructure partner to millions of retail users, more than 150 government agencies and more than 300 institutional clients globally, according to the release.
"At Coinbase, we believe that Bitcoin should do more than sit in a wallet. It should work for the people who hold it," said Mark Troianovski, head of consumer and platform partnerships at Coinbase, in the release. "Funding the first token-backed conforming mortgage is one of the most tangible demonstrations of that vision that we have seen."
The product was designed to address the changing financial profiles of modern homebuyers, allowing borrowers to pledge digital assets, initially Bitcoin and USD Coin, as collateral, the companies said. This enables borrowers to secure a mortgage without liquidating their holdings and sacrificing profits.
The companies plan to expand support to additional digital assets as the market matures, according to the release.
"The 30-year fixed mortgage was designed for a generation that kept its savings in a bank account and built equity through a single employer. That's not the financial reality of millions of qualified buyers today that are building real wealth in digital assets," Better CEO Vishal Garg said in a press release.
At Better, 41% of preapproved customers qualify on income and credit but don't have the cash needed for a traditional down payment. The median age of first-time homebuyers in the United States also reached a record high of 40 years old, due to
