Coinbase and Better Issue First U.S. Bitcoin-Backed Mortgage

Crypto exchange Coinbase and mortgage lender Better Mortgage have partnered to issue the first Bitcoin mortgage in the U.S. This comes just months after mortgage giant Fannie Mae announced it would begin accepting crypto for mortgage down payments.

Coinbase Announces Issuance Of First Bitcoin Mortgage

In an X post, the crypto exchange announced that they had just funded the first-ever Fannie Mae-insured mortgage backed by BTC in the U.S. Better Mortgage was responsible for servicing the mortgage while Coinbase powered the transaction.

The crypto exchange also announced that it plans to roll out this service nationwide this summer. According to a Yahoo Finance report, Coinbase and Better issued this Bitcoin mortgage to Joe and Amy of Ann Arbor, Michigan.

Joe said he now has “positive feelings” about the mortgage industry, since their Bitcoin is safe and sound in a custody account that secures their down payment. He also expects the BTC price to rise over time, which could help with the mortgage.

Commenting on the first Bitcoin mortgage, Vishal Garg, founder and CEO of Better, opined that crypto-backed conventional mortgages are a generational next step. He noted that American households are moving their money away from banks and into crypto and other assets, which makes this shift significant.

Garg further said that the tokenized mortgage will expand from crypto and stablecoins to other digital assets, such as tokenized stocks. Meanwhile, Roy Zhang, Coinbase’s director of product, noted that the Bitcoin mortgage process is entirely digital.

He explained that the top crypto exchange connects its users with significant Bitcoin holdings to lenders that offer crypto-backed mortgages using their portfolios. “They click through on our product interface. They go through the application process on Better. Better approves them. They sign in to their Coinbase account, and with a single click, their bitcoin moves into a custodial wallet. And then they’re done,” he noted.

Fannie Mae’s Role In The Transaction

The Better Mortgage CEO highlighted the importance of Fannie Mae’s backing of the transaction. As CoinGape reported, Fannie Mae announced plans in March to begin accepting crypto for mortgage down payments.

Garg noted that the fact that the Bitcoin mortgage complies with the underwriting requirement of a Fannie Mae confirming mortgage means that it is a standard product in the financial system. “It’s a huge deal because it basically means that you have a U.S. government-sponsored enterprise accepting digital assets as a replacement for cash in a bank account as collateral,” he added.

Better has already rolled out a waitlist for the product, which they plan to launch this summer. The mortgage lender estimates a projected loan volume of $250 million based on the waitlist data. Meanwhile, it is worth noting that current loans are pledged with Bitcoin and USDC, and there is no liquidation of this collateral.