A Michigan couple just bought a home using Bitcoin as collateral for a Fannie Mae-backed mortgage. They didn’t sell any of it.
The loan was funded on June 4 and closed through a partnership between Coinbase and Better Home & Finance Holding Co. (BETR). This is the first time a government-backed company has accepted a conforming mortgage loan with this structure.
How loans actually work
This is not a single mortgage with Bitcoin stuffed into the underwriting. There are actually two loans combined at closing.
The first is a standard Fannie Mae-backed mortgage. The second type is individual loans secured by the borrower’s digital assets. Digital assets are stored on Coinbase Prime, the company’s institutional storage arm. Borrowers pledging BTC must provide a 250% guarantee. This means $250,000 in Bitcoin for every $100,000 borrowed against BTC. for $USDCfor stablecoins, the ratio drops to 125%.
If a borrower defaults on a payment, liquidation of virtual currency will not begin until 60 days have passed since the delinquency. Once repaid in full, the borrower gets their digital assets back.
regulatory runway
In June 2025, the Federal Housing Finance Agency (FHFA) issued a directive requiring both Fannie Mae and Freddie Mac to consider digital asset holdings when evaluating mortgage risk.
Better and Coinbase announced their partnership on March 26th and built the product framework in the months that followed. Improve response from the financing side. Coinbase manages storage and compliance.
Nationwide rollout is scheduled for the summer of 2026, and will initially be based on Bitcoin and $USDC As collateral accepted. In Fannie Mae’s case, the GSEs are not directly exposed to Bitcoin price fluctuations because crypto collateral backs the second loan, rather than the conforming mortgage itself.
Why crypto holders should pay attention
The immediate attraction is the tax saving effect. Under current U.S. tax law, selling Bitcoin for a down payment is subject to capital gains tax. This product avoids that completely. Borrowers pledge their Bitcoins without selling them. There are no sales or tax events. They retain access to the capital locked within their holdings while retaining ownership and future upside potential.
The risks are still real. A sharp decline in Bitcoin could cause widespread margin call-style liquidations across these second loans. Bitcoin has historically fallen more than 70% many times. The 250% coverage provides some cushion, but you can test that cushion.
