Better Mortgage and Coinbase announced general availability of a Bitcoin-backed conforming mortgage product on August 26. The offering pairs a standard first mortgage conforming to Fannie Mae guidelines with a separate loan that funds the down payment, secured by pledged Bitcoin and a second lien on the property.
Under the current terms, Bitcoin carries a 40% advance rate, meaning $250,000 in pledged Bitcoin supports a $100,000 down payment loan. Borrowers transfer their Bitcoin to a custodial account on Coinbase Prime and retain economic exposure to the asset but surrender control and liquidity during the pledge period.
Price Movements Don't Trigger Margin Calls
A key distinction from conventional crypto margin loans is that day-to-day Bitcoin price movements alone do not trigger margin calls or forced liquidation under Better's published terms. Instead, the liquidation trigger is payment delinquency. Better begins counting delinquency the day after a missed payment and allows borrowers 30 days to bring their account current. If delinquency extends to 60 days, Better may liquidate the pledged Bitcoin.
Additional Risks and Eligibility Requirements
Forced liquidation of pledged Bitcoin can eliminate future upside on the asset and may create a taxable event. The second lien also gives the down payment lender an additional secured claim against the home itself.
The product is not available to all U.S. borrowers. Applicants must have a verified Coinbase account, satisfy Better's underwriting standards and conforming loan requirements, and purchase in an eligible jurisdiction. Better specifies a minimum FICO score of 680 and notes the product may be limited to select states, though a detailed state-by-state list is not published.
Coinbase provides account transfer and Prime infrastructure but does not originate or service the loans. Better handles applications, underwriting, closing, and ongoing servicing.
