Fannie Mae has joined forces with Better Home & Finance and Coinbase to introduce a crypto-backed mortgage option, enabling buyers to use their cryptocurrency holdings as down payments.
This innovative product, created in collaboration by Better Home & Finance and Coinbase, allows homebuyers to secure a conventional 15- or 30-year Fannie Mae-backed mortgage while using either bitcoin or USDC (a dollar-stable coin) as collateral for the down payment.
In this arrangement, once the crypto assets are pledged, they cannot be traded. Should the value of the pledged cryptocurrency decline, it does not affect the primary Fannie Mae-backed mortgage as long as the borrower continues making their monthly payments. The interest rates on both loans are anticipated to fall within a range from those comparable to traditional mortgages to 1.5 percentage points higher, potentially increasing the overall cost of ownership compared to a conventional mortgage with a cash down payment.
Regulatory and Market Landscape
Operating in a favorable regulatory environment, this product aligns with directives from the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae. The FHFA instructed both entities in June 2025 to prepare for recognizing crypto as an asset on mortgage applications, following support from the Trump administration for the cryptocurrency industry.
There is evidence suggesting a significant interest in this product. According to Gallup, roughly 14% of American adults owned cryptocurrency by 2025. A separate Redfin survey showed that nearly 13% of millennials and Gen Z homebuyers had sold their crypto holdings as part of their down payments, indicating a growing segment seeking alternative paths to homeownership.
The primary motivation for using collateral rather than selling is often tax-related. Selling appreciated cryptocurrency would trigger capital gains taxes, whereas pledging it avoids such liability while retaining market exposure.
Niche Beginnings and Broader Potential
While not completely novel, crypto-backed mortgages are a step forward. Since 2022, Milo, a US-based fintech company, has been offering this product and reported serving over 100 customers as of the current announcement. Its typical clients often hold substantial assets but may not meet traditional lending criteria, a profile somewhat similar to that of foreign nationals interested in purchasing US real estate.
The key difference with Fannie Mae’s direct involvement lies in its potential for broader adoption. The GSE’s acceptance of such a product typically signifies a level of standardization, allowing other lenders to eventually offer comparable structures under Fannie Mae guidelines. Whether this product can move beyond its current niche depends on various factors including the rate of borrower uptake, risk tolerance, and the trajectory of cryptocurrency valuations, which have fallen more than 40% from their October 2024 peak.
