Coinbase Debuts First Fannie-Eligible Crypto Mortgage Product

Fannie Mae will soon accept its first ever crypto-backed home loans, the result of a collaboration between mortgage company Better Mortgage and crypto exchange Coinbase.

What's the Scoop?

• New Product: Offered by Better Mortgage and powered by Coinbase, a new crypto-backed loan product will soon empower BTC and USDC holders to collateralize their crypto assets for a down payment loan, a second loan in addition to a home mortgage. While not the first crypto loan product, it will be the first one eligible for repurchase by Fannie Mae, a government-sponsored home loan securitizer.
• Loan Terms: Instead of putting down cash, borrowers can pledge crypto holdings as collateral for a separate loan that’s used to cover the down payment. This new structure will empower borrowers to purchase homes without needing to sell crypto assets to fund a downpayment. Loans require initial overcollateralization rates of 250% on BTC and 125% on USDC, but are not subject to margin call unless the borrower defaults.
• Bonus Rewards: If approved for a loan by Better, Coinbase One members will be eligible for a rebate equal to 1% of the mortgage value, allowing them to apply up to a maximum of $10k as a lender credit against closing costs.
• Asset Calculations: Crypto asset holdings can already be used to increase eligibility for home loans. In January, Newrez – a top five mortgage lender and servicer – said it would begin including crypto assets in wealth calculations during its home loan underwriting process.
• Policy Push: Last June, U.S. Director of Federal Housing William Pulte ordered government-sponsored mortgage securitizers Fannie Mae and Freddie Mac to begin recognizing cryptocurrencies as assets in their home loan calculatios.