Homebuyers can now borrow against Bitcoin to get a mortgage without selling or liquidation risk

Better Home & Finance and Coinbase have introduced a new financing structure that allows eligible homebuyers to use their Bitcoin or USD Coin (USDC) holdings as collateral to secure a separate loan for a down payment, enabling them to obtain a standard conforming mortgage without selling their digital assets. This arrangement addresses affordability pressures in the US housing market, where high mortgage rates and low inventory are locking out many buyers, particularly younger ones who hold significant crypto wealth. The structure involves two loans: a traditional mortgage and a privately financed loan secured by the pledged crypto. For Bitcoin collateral, the initial value must be 250% of the loan amount; for USDC, it is 125%. Crucially, borrowers are not subject to margin calls if the collateral value drops; liquidation only occurs after 60 days of payment delinquency, mirroring conforming mortgage stress treatment. While the pledged assets are locked, USDC holders can still earn rewards. This product is seen as an initial step by Better and Coinbase to integrate on-chain wealth into mainstream finance, though it faces political scrutiny regarding the risk of incorporating volatile assets into federally backed mortgage channels.

(Source：CryptoSlate)