Has the era of buying homes with Bitcoin arrived? Coinbase partners with Freddie Mac to launch crypto-backed mortgages
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Has the era of buying homes with Bitcoin arrived? Coinbase partners with Freddie Mac to launch crypto-backed mortgages
From the Fringe to the Mainstream: Coinbase and Freddie Mac Bring Bitcoin-Collateralized Mortgages to Everyday U.S. Homebuyers
Navigating Web3 tides with focused insightsBy Micah Zimmerman
Translated by AididiaoJP, Foresight News
Coinbase is partnering with Better Home & Finance to launch a Bitcoin-backed mortgage loan backed by Freddie Mac.
This collaboration marks a significant step toward integrating digital assets into the traditional housing finance system. Coinbase and Better Home & Finance have jointly introduced a crypto-backed mortgage loan supported by Freddie Mac, opening a new pathway for applying digital assets in housing finance.
This innovative product allows qualified borrowers to use Bitcoin or USDC as collateral for their down payment without selling their digital assets. This approach avoids triggering potential capital gains taxes while enabling borrowers to retain market exposure to their holdings.
The loan is designed as a compliant financial product, with standards and safeguards aligned with those of conventional Freddie Mac–backed mortgages. Better handles loan origination and servicing, while Coinbase provides custody and related infrastructure support for the pledged Bitcoin and other crypto assets.
The product aims to address a longstanding barrier in the housing market: the upfront cash requirement for down payments.
According to Better’s data, approximately 41% of U.S. households cannot afford to purchase homes due to insufficient liquid funds—even though they hold wealth in other forms.
Vishal Garg, CEO of Better, said: “For decades, Americans’ path to homeownership has been limited to selling assets, liquidating investments, or tapping retirement savings. This partnership creates a brand-new path for millions of Americans holding digital assets.”
Per the companies’ press release, they estimate that roughly 52 million Americans—about 20% of the adult population—have held digital assets at some point.
By allowing borrowers to pledge crypto assets instead of cash, the product seeks to unlock balance-sheet liquidity and facilitate home purchases.
Bitcoin-Backed Mortgages
Unlike traditional crypto-backed loans, this product is designed to minimize borrowers’ exposure to volatility risk. It imposes no margin calls or requirements for additional collateral. Even if Bitcoin’s price declines, borrowers are not required to post extra collateral, and mere market fluctuations will not trigger asset liquidation.
Collateral is only at risk of disposition if the borrower defaults on mortgage payments for at least 60 days—a process consistent with standard foreclosure procedures in traditional housing finance.
Mortgages backed by crypto assets are expected to carry interest rates approximately 0.5 to 1.5 percentage points higher than standard 30-year mortgages, depending on the borrower’s profile. Coinbase believes this incremental cost may be worthwhile for borrowers seeking to avoid selling their assets.
Max Branzburg, Head of Consumer and Business Products at Coinbase, stated: “Converting digital wealth into home-buying power is a landmark advancement. Token-backed mortgages represent our first step in creating a new path to homeownership for the next generation.”
The product reflects an evolution in wealth-holding patterns—especially among younger Americans. Coinbase data shows that 45% of young investors hold crypto assets, compared to just 18% among older demographics—indicating that digital assets are increasingly becoming a primary store of value for the younger generation.
At the same time, housing affordability continues to deteriorate. Home prices have outpaced income growth, leaving many prospective buyers in a “wealthy but cash-poor” predicament. Token-backed mortgages aim to bridge this gap by treating crypto assets as usable collateral—not merely speculative investments.
Better has previously explored alternative collateral models. In 2023, the company allowed select Amazon employees to pledge company stock as down payment collateral. Company executives say incorporating Bitcoin and other crypto assets will significantly expand loan demand. Garg estimates that had such a product launched earlier, Better could have avoided up to $40 billion in lost loan volume.
The product structure also introduces features unique to digital assets. Borrowers pledging USDC can continue earning yield on their holdings, which can offset part of their mortgage costs. Additionally, Coinbase’s custody model allows users to pledge only specific portions of their portfolio—without locking up their entire asset base.
The two companies say they plan to gradually expand the list of eligible collateral types, potentially including tokenized equities, fixed-income products, and real estate assets.
Although crypto-backed mortgages have existed in niche wealth management channels, Freddie Mac’s involvement signals broader mainstream adoption. As a government-sponsored enterprise, Freddie Mac sets standards for a substantial portion of the U.S. mortgage market.
By combining Bitcoin collateral with a compliant loan structure, the Coinbase–Better partnership positions digital assets as integral components of mainstream financial infrastructure—not as a parallel, isolated system.
Coinbase describes the product as “as American as apple pie,” calling it an evolution—not a departure—from traditional housing finance.
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