Better Mortgage and Coinbase have opened applications for a bitcoin-linked home financing product, moving it from a waitlist to broader availability. Eligible U.S. homebuyers can pledge bitcoin rather than sell it to fund a cash down payment.
Bitcoin does not replace the mortgage
The product is often described in shorthand as a bitcoin-backed mortgage, but the structure is narrower than that. Bitcoin does not directly secure the first-lien mortgage, and it does not replace the home loan itself.
Instead, the arrangement combines two loans. One is a standard Fannie Mae-conforming mortgage on the property. The other is a separate down payment loan secured by pledged bitcoin and a second lien on the home. Better originates, underwrites and services the loans, while Coinbase provides account connectivity and the Coinbase Prime custody setup.
Two loans, one monthly payment
Borrowers close on two loans at the same time. The first is a conventional conforming mortgage tied to the property. The second provides the cash needed for the down payment and is backed by both the bitcoin collateral and a subordinate lien on the home, according to Better’s product terms.
Both loans carry the same interest rate and repayment term. That leaves the borrower with one combined monthly payment.
Bitcoin is valued at 40% for collateral purposes
Better says bitcoin posted as collateral is valued at 40% of its market price, equal to a 250% collateralization ratio. In the company’s example, $250,000 worth of bitcoin can support a $100,000 down payment loan.
The bitcoin is transferred from the borrower’s Coinbase account into Better’s custodial account on Coinbase Prime.
A decline in bitcoin’s price on its own does not trigger margin calls, collateral top-ups or liquidation. Still, Coinbase’s support page says Better may liquidate the pledged bitcoin once a borrower is 60 days delinquent. The collateral stays under Better’s control until the mortgage is repaid or refinanced.
Up to $10,000 is structured as lender credits
Coinbase markets the offer as up to $10,000 back at closing. The terms define that benefit as lender credits rather than cash.
If Better approves the loan, Coinbase One members can receive closing-cost credits equal to 1% of the principal balance of each loan. The aggregate cap is $10,000, and the benefit is limited by eligible closing costs. Better pays those credits, and Coinbase does not underwrite or service either loan.
From March announcement to open applications
The two companies first announced the partnership in March. At the time, Coinbase said prospective borrowers would “soon” be able to use bitcoin and directed them to register for early access. Better later said the waitlist opened in June. Its product page now says interested borrowers can begin an application today.
Better also said responses from the waitlist represented more than $260 million in projected loan volume before general availability. The company’s wording makes clear that this figure reflects projections from prospective borrowers, not approved mortgages or closed loans.
Open applications do not mean universal eligibility
General availability does not mean every buyer qualifies. Better’s terms require a minimum FICO score of 680, compliance with Fannie Mae conforming-loan criteria and a property located in an eligible jurisdiction.
The same terms say the program may be available only in select states and jurisdictions. Every loan still goes through underwriting and credit approval.
Borrowers keep bitcoin exposure, but the collateral is restricted
The structure allows borrowers to keep exposure to bitcoin without facing price-triggered margin calls. At the same time, the pledged assets cannot be sold, transferred or repledged without Better Mortgage’s prior written consent.
If a borrower defaults on the down payment loan, Better may liquidate the collateral.