Coinbase Lets Americans Turn Bitcoin and USDC into Home Down Payments Without Selling Their Assets

Crypto Investors Can Now Use Bitcoin and USDC to Fund Home Down Payments

Homebuyers in the US may soon be able to turn their digital assets into real estate without selling a single token.

Coinbase Global Inc is partnering with Better Home & Finance Holding Co to offer a mortgage product that allows borrowers to pledge Bitcoin or USDC stablecoins as collateral for a separate loan used to cover Fannie Mae-eligible down payments.

This structure lets investors preserve their holdings, avoiding capital gains taxes while still accessing cash for a home purchase.

How Crypto Works as Mortgage Collateral

The arrangement involves two loans at closing: a conventional Fannie Mae-backed mortgage on the home and a second loan secured by cryptocurrency for the down payment.

Both loans share the same interest rate and amortisation term, resulting in a single monthly payment.

According to Coinbase, changes in cryptocurrency prices will not affect the mortgage terms, and pledged assets face liquidation only if borrowers fall 60 days behind on payments.

Mark Troianovski, head of consumer and platform business development at Coinbase, explained:

“You don’t sell your equities to qualify for mortgage. You borrow against them. In the same way, this is about getting utility from your crypto for real world use cases.”

Fannie Mae Approval Signals Broader Acceptance

While crypto-backed mortgages exist in some form, Fannie Mae’s involvement is notable.

The government-sponsored enterprise, overseen by the Federal Housing Finance Agency, plays a key role in the US housing market.

Its approval aligns with a wider policy shift: in June last year, FHFA director Bill Pulte indicated support for considering crypto held on regulated exchanges when assessing mortgage risk.

The product follows conventional conforming loan guidelines, which usually provide lower interest rates and standardised terms.

Bridging the Homeownership Gap for Crypto Holders

Better Home founder Vishal Garg highlighted the practical impact:

“Some 41% of American families fail to buy a home because they don't have enough funds for the down payment, even though they have money elsewhere in savings.”

He added that a $400,000 home, for example, would require $40,000 in cash down, a sum that many potential buyers struggle to gather without selling assets.

By allowing crypto investors to pledge their holdings directly from Coinbase to a custody wallet with Better, borrowers can avoid complex tax filings and retain ownership of their assets.

Garg said that if such programs had existed earlier, “we would have funded maybe 40 billion more of consumer demand over the past few years.”

Interest Rates and Loan Terms Explained

Rates for crypto-backed mortgages are expected to be between 0.5 and 1.5 percentage points higher than standard 30-year loans, depending on the borrower’s profile.

Coinbase emphasises there are no margin calls or top-ups triggered by market fluctuations.

If Bitcoin drops in value, the mortgage terms remain unchanged, offering stability similar to traditional lending.

Troianovski described the product as “as American as apple pie,” adding:

“People who are sitting on Bitcoin or USDC can put a roof over their head without needing to sell it, without needing to incur capital gains. We are giving people access to housing in a way that is very similar to how private bankers serve some of the wealthiest customers. They don't sell assets to buy stuff; they actually take loans against assets.”

Mainstreaming Crypto in Financial Life

The move comes after major developments in crypto adoption, including the 2024 launch of spot-crypto ETFs and White House initiatives expanding alternative investments in retirement accounts.

Coinbase’s Kara Calvert said the product will expand homeownership access for Americans whose wealth does not sit in traditional accounts, while operating “within the safeguards of the existing mortgage system, including how risk like asset volatility is managed.”

With median first-time homebuyers now 40 years old, up from 32 in 2000, elevated borrowing costs, high prices, and limited supply have tightened access to homeownership.

Crypto-backed mortgages could offer an alternative route for those holding digital wealth, allowing them to retain exposure while entering the housing market.

Shares reacted modestly to the news, with Coinbase falling about 2% to US$177.19 and Better Home rising roughly 8% to US$33.88 as of mid-morning trading in New York.

The product is expected to roll out within the next three months, giving crypto holders a new path to convert digital assets into tangible homes while keeping potential upside in their portfolios.