Fannie Mae began accepting crypto-backed mortgages on March 26, 2026, following a June 2025 directive from Federal Housing Finance Agency Director William J. Pulte. Better Home & Finance and Coinbase closed the first conforming loan — a Bitcoin-collateralized mortgage for a couple in Ann Arbor, M...
"Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional down payment." — Max Branzburg, Vice President of Product, Coinbase
Fannie Mae began accepting crypto-backed mortgages on March 26, 2026, following a June 2025 directive from Federal Housing Finance Agency Director William J. Pulte. Better Home & Finance and Coinbase closed the first conforming loan — a Bitcoin-collateralized mortgage for a couple in Ann Arbor, Michigan — on June 4, 2026. A nationwide rollout is underway, with a waitlist representing approximately $250 million in projected loan volume.
The product arrives amid a U.S. housing affordability crisis: the median first-time homebuyer age has hit a record 40 years, first-time buyers account for just 21% of purchases (versus the historical norm of 40%), and median home prices have risen for 36 consecutive months to $440,600. Better reports that 41% of its pre-approved borrowers meet income and credit requirements but lack sufficient cash for a traditional down payment.
The structure introduces a two-loan mechanism — a standard Fannie Mae-conforming mortgage paired with a separate crypto-collateralized down payment loan — that effectively brings leveraged finance mechanics into the government-sponsored housing system. Five Senate Democrats have raised formal objections, drawing comparisons to the conditions preceding the 2008 financial crisis.
The Better-Coinbase crypto mortgage comprises two distinct loans:
First lien: A standard 15- or 30-year fixed-rate mortgage written to Fannie Mae's conforming guidelines. This loan is eligible for sale into the secondary mortgage market, meaning it can be packaged into mortgage-backed securities.
Second lien: A privately financed loan that funds the cash down payment, secured by cryptocurrency held in a custodial account on Coinbase and by a second lien on the property. The two loans share identical interest rates and amortization schedules with consolidated monthly payments.
Collateral requirements differ by asset type. Bitcoin-backed loans require a 2.5-to-1 ratio: a borrower must pledge $250,000 in BTC to secure $100,000 in down payment financing. USDC-backed loans carry a more favorable 1.25-to-1 ratio, reflecting the stablecoin's lower volatility profile.
Under Fannie Mae's broader framework for recognizing crypto as reserves (separate from the Better-Coinbase product), a 50-60% volatility haircut applies. A borrower holding $100,000 in Bitcoin receives credit for only $40,000-$50,000 toward reserve requirements. Staked assets and DeFi-locked positions are excluded. All holdings must be on U.S.-regulated exchanges — self-custodied cold wallets do not qualify. Borrowers must provide exchange statements showing 60-day holding history consistent with standard reserve seasoning requirements.
The mortgage carries rates 0.5 to 1.5 percentage points above standard 30-year loans, depending on borrower profiles. Better states there are no margin calls — if Bitcoin's price declines, mortgage terms remain unchanged. However, delinquency is triggered after 60 days, compared to approximately 120 days for traditional mortgages.
At launch, only Bitcoin and USDC are accepted. Additional cryptocurrencies are planned for future inclusion.
The crypto mortgage product targets a specific market failure. The median age of a first-time homebuyer in the U.S. reached 40 in 2026, according to the National Association of Realtors, up from 32 roughly a decade ago. First-time buyers represent just 21% of all home purchases — the lowest share since NAR began tracking in 1981. The median home price hit $440,600, representing a price-to-income ratio near 6.0x, compared to 4.3x in 2003.
According to Better, 41% of its pre-approved borrowers qualify on income and credit but cannot assemble a cash down payment. Meanwhile, approximately 14% of U.S. adults hold cryptocurrency, according to Gallup, with alternative estimates reaching 30%. Among American millionaires, the figure is 68%. Gen Z and Millennials allocate approximately 25% of portfolios to non-traditional assets including crypto, according to Coinbase data.
The demand signal from Better's waitlist supports this thesis: 76% of waitlist signups are existing Coinbase users, 37% hold $500,000 or more in cryptocurrency, 63% plan to purchase within six months, and the highest interest comes from California, New York, and Florida.
Janine Yorio, CEO of Interstice Digital, framed the problem: "Before this product existed, [crypto holders] faced a stark choice: Sell the position, pay capital gains taxes and forfeit future appreciation, or stay out of the housing market."
The tax angle is material. A crypto holder sitting on $250,000 in appreciated Bitcoin faces a potential federal capital gains tax of 15-20% (plus state taxes) upon liquidation. The collateral structure allows the borrower to avoid this taxable event entirely while accessing home financing.
The Better-Coinbase product is not the first crypto mortgage in the U.S., but it is the first to carry Fannie Mae conforming status — a distinction that matters for secondary market liquidity and pricing.
Milo has operated crypto-backed mortgages since 2022 and crossed $100 million in cumulative originations in February 2026, including a single $12 million transaction. Milo's loan book quadrupled in 2025. The company accepts Bitcoin, Ethereum, and USDC as collateral, with loan amounts up to $25 million and interest rates averaging around 7%. Milo reports zero margin calls across its entire portfolio.
Newrez, owned by Rithm Capital (approximately $53 billion in assets under management), became the first top-25 mortgage lender to recognize crypto assets for mortgage qualification, launching its program in early 2026. Newrez accepts Bitcoin, Ethereum, and U.S.-listed crypto ETFs at up to 50% of total asset value in USD; fiat-backed stablecoins are accepted at up to 90%. These qualify through Newrez's Smart Series non-agency loan products.
Figure opened a waitlist for crypto-backed mortgages offering up to $3 million per customer, collateralized by Bitcoin or Ethereum.
The competitive dynamic separates into two tiers: non-conforming products (Milo, Newrez, Figure) that sit outside the GSE system, and the Better-Coinbase conforming product that flows through Fannie Mae. The conforming designation provides access to the secondary market, potentially lowering borrower costs and increasing lender willingness to originate.
Bitcoin traded between a high above $123,000 in October 2025 and a low near $62,800 in February 2026 — a drawdown exceeding 49%. This range occurred within the same period that the first crypto mortgage products were being underwritten.
Michael Branson, CEO of All Reverse Mortgage, identified the core structural concern: "You're essentially stacking two volatile assets on top of each other. Crypto moves 24 hours a day, and housing markets can turn fast."
The 2.5-to-1 collateral ratio for Bitcoin provides a 60% buffer before the collateral value falls below the loan amount. Given Bitcoin's observed maximum drawdown of roughly 50% in recent cycles, this buffer covers most historical scenarios — but not all. A decline exceeding 60% from the pledge date would leave the collateral underwater.
Better states the product has no margin calls. However, Yorio warned of stress dynamics in a downturn: "If collateral and home values decline simultaneously, lenders could face pressure to issue margin calls or demand additional collateral at the exact moment borrowers are under stress. That's where these products start looking less like traditional mortgages and more like leveraged finance products."
Bill Dallas, a 40-year mortgage industry veteran and CEO of Dallas Capital, identified lenders as the primary risk-bearers due to their contractual representations and warranties to Fannie Mae.
Standard mortgage stress-testing models are calibrated to real estate price cycles and employment-linked default probabilities. Bitcoin's drawdown volatility does not fit these frameworks. The underwriting requires dynamic collateral haircuts, real-time valuation feeds, and liquidation triggers that do not exist in conventional fixed-rate mortgage infrastructure.
The crypto mortgage program has opened a visible partisan divide.
In favor: FHFA Director William J. Pulte issued the June 25, 2025 directive ordering Fannie Mae and Freddie Mac to develop plans to accept cryptocurrency as assets without forced conversion to dollars. Senator Cynthia Lummis (R-WY) introduced the 21st Century Mortgage Act to codify this policy, explicitly prohibiting forced crypto liquidation and requiring GSEs to recognize assets recorded on cryptographically secured ledgers.
Opposed: Senators Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Mazie Hirono (D-HI), and Bernie Sanders (I-VT) sent a letter to FHFA criticizing the decision. The letter stated that "expanding underwriting criteria to include the consideration of unconverted cryptocurrency assets could pose risks to the stability of the housing market and the financial system."
Senator Merkley drew a direct comparison to the 2008 financial crisis: "The 2008 crisis proved that lax financial practices around risky investments can blow up the housing market — and hardworking families in Oregon and across the country paid the price."
The senators noted that crypto-backed mortgages launched without a pilot program, public comment period, or published research into default risk. The National Consumer Law Center published an op-ed on June 23, 2026, characterizing the program as "crypto's next gamble" on the mortgage system.
American taxpayers bear the tail risk: as Fannie Mae is a government-sponsored enterprise, defaults on conforming loans can ultimately flow to the federal balance sheet. The scale of this exposure is currently minimal — Milo's non-GSE portfolio numbers just over 100 customers, and Better's product has closed one loan — but the $250 million waitlist suggests rapid growth.
Fannie Mae has not publicly commented on the program.
The crypto mortgage market is moving from niche to conforming-eligible, a structural shift that changes the risk profile of the underlying asset class. By routing crypto-collateralized loans through Fannie Mae, the Better-Coinbase product gains access to the secondary mortgage market — the same infrastructure that amplified losses in the 2008 crisis when underlying collateral assumptions proved wrong.
The housing affordability data supports the demand thesis. Millions of potential borrowers hold crypto wealth but lack cash. The tax efficiency of pledging rather than selling adds a genuine financial incentive. Whether the 2.5x collateral buffer and no-margin-call structure prove sufficient through a full crypto bear cycle remains untested.
Current exposure is negligible. One closed loan and a $250 million waitlist do not constitute systemic risk. The question is what happens at scale — if crypto mortgages capture even 1% of the $1.8 trillion annual mortgage origination market, that represents $18 billion in loans backed by assets that can lose half their value in four months. The absence of a pilot program, stress-testing publication, or public comment period before the GSE system absorbed this new collateral type is the substantive concern that congressional critics have identified.
The market will provide its own stress test. Bitcoin's price action in the coming 12 months will determine whether the collateral buffers hold or whether the program produces the defaults that opponents predict.