NEW YORK — Better Mortgage and Coinbase have expanded a program that allows eligible cryptocurrency holders to use bitcoin or USDC as collateral for a loan funding the down payment on a home, the companies said.
The program, which became generally available to eligible Coinbase One members in the U.S. on Aug. 12, is designed to allow borrowers to retain their cryptocurrency rather than selling the assets to raise cash for a down payment.
Under the arrangement, borrowers pledge bitcoin or the USDC stablecoin as collateral for a separate loan. Proceeds from that loan are then used toward the cash down payment on a home, according to Better and Coinbase.
The companies said the structure could allow borrowers to avoid an immediate taxable event that could result from selling cryptocurrency to raise the money.
Mortgage, Crypto Loan Remain Separate
The first-lien mortgage is originated and serviced by Better and structured to comply with Fannie Mae guidelines, making it a conventional conforming mortgage, the companies said.
The mortgage remains separate from the loan secured by the borrower’s cryptocurrency.
Borrowers must qualify for the mortgage through Better and meet its underwriting and other eligibility requirements. They also take on the separate crypto-secured loan and remain exposed to fluctuations in the value of the bitcoin or USDC pledged as collateral, according to the companies.
Better and Coinbase initially announced the program in March and completed the first mortgage
using the structure in June before making it more broadly available in August.
Members Eligible for Up to $10,000 Credit
Coinbase One members approved for eligible Better home-financing products also can receive a lender-funded credit equal to 1% of the mortgage amount, up to $10,000, according to the companies.
The credit is applied to closing costs and disclosed on the borrower’s closing disclosure.
The incentive also is available on Better’s standard mortgages, home equity lines of credit and refinancing products, the companies said.
Better said an earlier waiting list for the crypto-backed program represented more than $260 million in projected mortgage volume. Approximately 60% of respondents indicated they intended to purchase a property within six months.
Those figures represented expressions of interest rather than completed mortgage originations.
The broader rollout expands availability of the companies’ crypto-backed down-payment model in the U.S. while keeping the digital-asset-backed borrowing separate from the first-lien mortgage.
