Coinbase and Better Take Bitcoin-Backed Mortgages Beyond the Waitlist

Better Mortgage and Coinbase have opened applications for a bitcoin-backed home-financing product, moving it from a waitlist to general availability and allowing qualifying U.S. buyers to pledge bitcoin instead of selling it to fund a cash down payment.

Despite the shorthand, bitcoin does not replace the mortgage or directly back the first-lien loan. The structure pairs a conventional, Fannie Mae-conforming mortgage with a separate downpayment loan secured by pledged bitcoin and a second lien on the home. Better originates, underwrites and services the loans; Coinbase supplies account connectivity and the Coinbase Prime custody infrastructure.

Two Loans

A borrower closes two loans. The first is a standard conforming mortgage on the property. The second supplies the cash down payment and is secured by the bitcoin plus a subordinate lien on the home, according to Better's product terms. Both loans carry the same interest rate and repayment term, producing one combined monthly payment.

Bitcoin is valued at 40% of its market value for collateral purposes, equivalent to a 250% collateralization ratio. Better's example says $250,000 of bitcoin can support a $100,000 downpayment loan. The bitcoin moves from the borrower's Coinbase account to Better's custodial account on Coinbase Prime.

Bitcoin price declines alone do not trigger margin calls, collateral top-ups or liquidation. However, Coinbase's support page says Better may liquidate the pledged bitcoin after the borrower is 60 days delinquent. The collateral remains under Better's control until the mortgage is repaid or refinanced.

Coinbase promotes as much as $10,000 “back” at closing. The offer terms define the benefit as a lender credit rather than cash. If Better approves a loan, Coinbase One members can receive closing-cost credits equal to 1% of the principal balance of each loan, capped at $10,000 in aggregate and limited by eligible closing costs. Better pays the credits, and Coinbase does not underwrite or service either loan.

From Early Access to Applications

The companies first announced the partnership in March, when Coinbase said prospective borrowers would “soon” be able to use bitcoin and directed them to register for early access. Better said a waitlist opened in June; its product page now says interested borrowers can start an application today.

Better said waitlist responses represented more than $260 million in projected loan volume before general availability. That figure is a projection from prospective borrowers, not approved or closed mortgages.

General availability is not universal eligibility. Better's terms require a minimum FICO score of 680, compliance with Fannie Mae conforming-loan criteria and a property in an eligible jurisdiction. The terms also say the program may be offered only in select states and jurisdictions, and every loan remains subject to underwriting and credit approval.

The structure lets borrowers retain exposure to bitcoin without a price-triggered margin call, but the pledged assets may not be sold, transferred or repledged without Better Mortgage's prior written consent. If the borrower defaults on the downpayment loan, Better may liquidate the collateral.