Fannie Mae will accept crypto-backed mortgages for the first time through a new product from Better Home & Finance and Coinbase (NASDAQ:COIN) that lets home buyers pledge Bitcoin (CRYPTO: BTC) or USDC (CRYPTO: USDC) as collateral.
How The Product Works
Home buyers get a traditional 15- or 30-year Fannie-backed mortgage from Better, then take out a separate loan backed by either Bitcoin or USDC to cover the down payment, The Wall Street Journal reported on Thursday.
This structure lets buyers avoid triggering capital gains taxes from selling crypto while maintaining exposure to the market.
The trade-off comes at a cost. Paying interest on two loans instead of making a cash down payment increases the overall cost of homeownership significantly.
Interest rates on both loans would range from comparable to typical Fannie Mae mortgages to 1.5 percentage points higher.
Once the homeowner pledges the crypto as collateral, they cannot …