Coinbase and Better Take Bitcoin-Backed Mortgages Beyond the Waitlist

The product pairs a conventional home loan with a separate downpayment loan secured by pledged bitcoin and a second lien on the property.

Better Mortgage and Coinbase have opened applications for a bitcoin-backed home-financing product, moving it from a waitlist to general availability and allowing qualifying U.S. buyers to pledge bitcoin instead of selling it to fund a cash down payment.

Despite the shorthand, bitcoin does not replace the mortgage or directly back the first-lien loan. The structure pairs a conventional, Fannie Mae-conforming mortgage with a separate downpayment loan secured by pledged bitcoin and a second lien on the home. Better originates, underwrites and services the loans; Coinbase supplies account connectivity and the Coinbase Prime custody infrastructure.

Two Loans

A borrower closes two loans. The first is a standard conforming mortgage on the property. The second supplies the cash down payment and is secured by the bitcoin plus a subordinate lien on the home, according to Better's product terms. Both loans carry the same interest rate and repayment term, producing one combined monthly payment.

Bitcoin is valued at 40% of its market value for collateral purposes, equivalent to a 250% collateralization ratio. Better's example says $250,000 of bitcoin can support a $100,000 downpayment loan. The bitcoin moves from the borrower's Coinbase account to Better's custodial account on Coinbase Prime.