Better Mortgage and Coinbase said Wednesday that their token-backed conforming mortgage — a home loan a buyer can fund by pledging Bitcoin or USDC rather than selling it — is now generally available, moving crypto collateral out of pilot mode and into the ordinary conforming market that Fannie Mae stands behind.
The companies disclosed the step in a joint announcement issued Wednesday morning. They said the loans are originated and serviced by Better, powered by Coinbase, and designed in accordance with Fannie Mae guidelines, “making the first lien a standard, conforming mortgage.” Better said more than $260 million in projected loan volume had accumulated before the product reached general availability.
How a token-backed mortgage works
The structure lets a borrower pledge digital assets to cover the cash down payment instead of converting those assets into dollars. Coinbase Custody holds the pledged collateral, and its architecture allows a borrower to commit a specific quantity and type of token rather than an entire account balance, according to the companies’ March 26 launch announcement.
Because the tokens are pledged rather than sold, the companies say borrowers can keep their positions intact. Both firms caution in the same announcement that tax treatment of crypto pledges varies and that borrowers should consult independent tax advisers. For USDC pledges, Better and Coinbase say the pledged stablecoin earns rewards that can be applied against mortgage payments, lowering the borrower’s net effective interest rate.
The first loan under the program closed in June. Better and Coinbase said on June 4 that a married couple in their early 30s in Ann Arbor, Mich. — a software engineer and a graduate student — had funded the first token-backed conforming mortgage by pledging Bitcoin. The companies did not disclose the loan amount.
A 1% rebate, and what it now covers
Coinbase One members approved for a Better loan receive a rebate equal to 1% of the mortgage value, capped at $10,000. The rebate is applied as a lender credit against closing costs, is funded by Better, and appears on the borrower’s closing disclosure.
Wednesday’s announcement widened that offer beyond purchase mortgages: it now extends to all of Better’s home-financing products, including standard mortgages, home equity line of credit balances and refinances. The expanded terms took effect Aug. 12.
Better also released waitlist figures that suggest where the demand is concentrated. The company said 76% of respondents were already Coinbase One users and 60% intended to buy a home within six months.
“This partnership expands homeownership access by meeting borrowers where they are, allowing Coinbase One members to pledge crypto without selling holdings,” said Ziggy Jonsson, chief technology officer at Better Mortgage.
Ben Shen, head of financial services at Coinbase, said members “trust us with financial decisions,” and that the product “extends that to one of life’s biggest financial decisions.”
Why the conforming label matters
Conforming loans are the loans Fannie Mae and Freddie Mac buy, and they carry the pricing and liquidity that come with that. Getting a crypto-linked product into that channel is a different proposition from a niche portfolio loan held on a lender’s own books.
Fannie Mae’s existing rules treat digital assets narrowly. Under Section B3-4.1-04 of its Selling Guide, virtual currency is acceptable for a down payment, closing costs or reserves only when there is documented evidence it has been exchanged into U.S. dollars and held at a U.S. or state-regulated financial institution, and the funds are verified in dollars before closing. The guide also bars virtual currency from being used for the earnest money deposit. That policy has been in place since May 2022.
Better’s structure works around the conversion requirement by using the pledge to fund the cash down payment while the first lien itself remains an ordinary conforming loan. RealtyWire has previously covered how Fannie Mae and Freddie Mac adjust their loan eligibility rules, and how Fannie Mae’s purchase-mortgage volume has been climbing this year.
The backdrop at Better
The rollout lands during an unsettled stretch for the lender. Founder Vishal Garg — who was the public face of the Coinbase partnership when it launched in March and again in June — stepped down as chief executive on Aug. 3, with board member Daniel Lewis named interim CEO. Wednesday’s announcement was carried by the company’s chief technology officer instead.
Better describes itself as an AI-native mortgage platform that has funded more than $110 billion in loans and lends in all 50 states and the United Kingdom.
What it means
Verified: the product is live nationwide, the rebate now covers refinances and HELOC balances, and the first loan funded in June. Those facts come from the companies’ own announcements.
Company claim: the $260 million figure is Better’s projection of waitlist volume, not closed originations, and the waitlist percentages describe people who signed up — not the general borrower population.
RealtyWire analysis: the significant part is not the rebate but the channel. If pledged-crypto down payments can sit underneath standard conforming paper at scale, the practical question for the rest of the industry becomes how collateral volatility is margined and monitored over a 30-year term — something neither announcement addresses.
What to watch: whether closed volume tracks the waitlist projection, whether other lenders follow into the conforming channel, and whether Fannie Mae’s guidance on virtual currency is revisited. More coverage in RealtyWire’s mortgage section.
