Fannie Mae will accept cryptocurrency-backed mortgages for the first time under a new partnership between crypto exchange Coinbase and mortgage services company Better.
Prospective home buyers will be able to pledge Bitcoin or USDC stablecoins as collateral to fund down payments, the companies said.
“Better was founded to make homeownership more accessible for all Americans, and this partnership with Coinbase introduces a new pathway to realizing the American Dream for the 52 million Americans who own digital assets,” said Better CEO Vishal Garg.
“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,” said Coinbase head of consumer and business products Max Branzburg.
Buyers who qualify for a mortgage with Better can secure loans against their cryptocurrency holdings for a down payment. These loans will be separate from the Fannie Mae-backed mortgage, though both will be combined in a single payment to Better.
Once cryptocurrency assets are pledged, they cannot be traded, the companies said. Fluctuations in the value of these coins will not change loan payments.
While some companies currently offer crypto-backed loans, such as lending services company Milo, Better, and Coinbase’s loans, will be the first supported by Fannie Mae. Milo said it had surpassed US$100 million in crypto-backed mortgage originations last month.
Bitcoin has fallen by 40.3% in the past six months, though it has ticked up 5% in the past month. USDC stablecoins, issued by crypto company Circle, are pegged to the U.S. dollar.
