Better and Coinbase have collaborated to introduce the first token-backed conforming mortgage, enabling borrowers to use BTC or USDC as collateral.
This unique product marks the initial instance of a conforming mortgage secured by digital assets, originated and serviced by Better and backed by Fannie Mae. The digital asset collateral is managed through Coinbase Custody and is associated with an additional privately funded loan used to cover the down payment.
Product Mechanics
Eligible borrowers can use BTC or USDC as collateral to meet their down payment requirements on Better’s platform. Unlike traditional securities-backed loans, borrowers can pledge specific quantities of eligible tokens instead of their entire account balance.
Market volatility in the value of BTC does not result in margin calls or require additional collateral. Collateral liquidation is only initiated following a 60-day payment delinquency, similar to standard conforming loans. Borrowers providing USDC also retain the right to earn staking rewards, which can offset mortgage payments.
Coinbase One members obtaining either a token-backed or traditional mortgage through Better are eligible for a rebate equivalent to 1% of the mortgage value, capping at USD 10,000. This rebate is applicable towards closing costs and fees.
The mortgage adheres to Fannie Mae guidelines, offering lower interest rates than typically seen in private token-backed lending products.
Market Context and Borrower Profile
This product aims to address the increasing disparity between how younger generations accumulate wealth and traditional mortgage qualification criteria.
According to Coinbase’s 2025 State of Crypto Report, 45% of younger investors hold digital assets compared to only 18% of older investors. Additionally, data from Redfin (2025) shows that 12.7% of Generation Z and Millennial homebuyers have already sold digital assets to fund their down payments, while this figure is just 3.5% for Generation X and a mere 0.5% for Baby Boomers.
The NCA 2025 State of Crypto Holders report reveals that 67% of token holders are under 45 years old, with 26% earning less than USD 75,000 annually. This suggests a broader demographic potential for this segment to access home financing without triggering capital gains tax events.
Better estimates that approximately 52 million American adults currently hold digital assets, representing about 20% of the adult population. The partnership positions the token-backed mortgage as a solution enabling this group to access home financing without incurring potential capital gains tax implications from asset liquidation.
For now, eligible digital assets are limited to BTC and USDC. Better and Coinbase plan to expand the product to include tokenised equities, fixed income instruments, and other tokenised real estate assets over time. Interested borrowers can sign up for early access through Better’s website.
