Coinbase, Fannie Mae To Introduce Crypto-Backed Mortgages

Fannie Mae will accept crypto-backed mortgages for the first time through a new product from Better Home & Finance and Coinbase (NASDAQ:COIN) that lets home buyers pledge Bitcoin (CRYPTO: BTC) or USDC (CRYPTO: USDC) as collateral.

How The Product Works

Home buyers get a traditional 15- or 30-year Fannie-backed mortgage from Better, then take out a separate loan backed by either Bitcoin or USDC to cover the down payment, The Wall Street Journal reported on Thursday.

This structure lets buyers avoid triggering capital gains taxes from selling crypto while maintaining exposure to the market.

The trade-off comes at a cost. Paying interest on two loans instead of making a cash down payment increases the overall cost of homeownership significantly. 

Interest rates on both loans would range from comparable to typical Fannie Mae mortgages to 1.5 percentage points higher.

Once the homeowner pledges the crypto as collateral, they cannot trade it.

However, even if the crypto's value falls, the mortgage loan remains unaffected as long as the homeowner continues making monthly payments, according to Vishal Garg.

Why This Matters Now

About 14% of American adults owned cryptocurrencies in 2025, according to Gallup. 

Many of these holders face a difficult choice when buying homes: sell crypto and trigger capital gains taxes, or skip homeownership entirely.

The demand is real. A 2025 Redfin survey found that almost 13% of millennial and Gen Z recent home buyers sold crypto investments to help fund their down payments. 

The new product targets buyers who want to avoid that forced liquidation.

“A lot of those crypto owners and investors have not been able to become homeowners because they don’t want to sell their crypto investments,” said Max Branzburg, Coinbase’s head of consumer and business products. 

“We haven’t really had the best way to service that need,” he added.

The Mainstream Catalyst

Fannie Mae’s involvement represents a watershed moment for crypto mortgages. 

While this isn’t the first crypto mortgage offering—Miami-based fintech Milo has offered similar products since 2022 with more than 100 customers—Fannie’s federal backing and oversight by the Federal Housing Finance Agency brings legitimacy.

The move follows FHFA Director Bill Pulte’s June directive to Fannie and sister company Freddie Mac to prepare to count crypto as an asset on mortgage applications, reflecting the Trump administration’s generally supportive stance toward the crypto industry.

Because Fannie and Freddie play such a large role in the mortgage market, their underwriting standards become widely adopted by other lenders. 

This acceptance could rapidly expand crypto-backed mortgages from a niche product into mainstream financing.

The Timing Challenge

Bitcoin prices have pulled back more than 40% since peaking in October, which means many crypto holders are sitting on unrealized losses rather than gains. 

This makes the product particularly attractive right now, as selling would lock in losses while pledging as collateral preserves the option to recover when prices rebound.

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