A Michigan couple just bought a house using Bitcoin as collateral for a Fannie Mae-backed mortgage. They didn’t sell any of it.
The loan, funded on June 4, closed through a partnership between Coinbase and Better Home & Finance Holding Co. (BETR). It’s the first time a government-sponsored enterprise has accepted a conforming mortgage structured this way.
How the loan actually works
This isn’t a single mortgage with Bitcoin stuffed into the underwriting. It’s actually two loans bundled at closing.
The first is a standard Fannie Mae-backed mortgage. The second is a separate loan collateralized by the borrower’s digital assets. The digital assets sit in custody at Coinbase Prime, the company’s institutional-grade storage arm. Borrowers pledging BTC must put up 250% coverage, meaning $250K in Bitcoin for every $100K borrowed against it. For USDC, the stablecoin, the ratio drops to 125%.
If a borrower falls behind on payments, liquidation of the crypto doesn’t kick in until 60 days of delinquency. Upon full repayment, borrowers get their digital assets back.
The regulatory runway
The Federal Housing Finance Agency (FHFA) issued a directive in June 2025 requiring both Fannie Mae and Freddie Mac to consider digital asset holdings when evaluating mortgage risk.
Better and Coinbase announced their partnership on March 26, building the product framework in the months that followed. Better handles the lending side. Coinbase manages custody and compliance.
A nationwide rollout is expected by summer 2026, initially limited to Bitcoin and USDC as accepted collateral. For Fannie Mae, the GSE isn’t directly exposed to Bitcoin’s price swings because the crypto collateral backs the second loan, not the conforming mortgage itself.
Why crypto holders should pay attention
The immediate appeal is tax efficiency. Under current US tax law, selling Bitcoin to fund a down payment triggers capital gains taxes. This product sidesteps that entirely. Borrowers pledge their Bitcoin without selling it. No sale, no taxable event. They retain ownership and any future upside while still accessing the capital locked inside their holdings.
Risks remain real. A sharp Bitcoin downturn could trigger widespread margin-call-style liquidations across these second loans. Bitcoin has dropped 70% or more multiple times historically. The 250% coverage ratio provides cushion, but that cushion can be tested.