Fannie Mae, the giant government-backed mortgage securitizer, is preparing to accept cryptocurrency as collateral for home loans for the first time, marking a further step in the integration of digital assets into traditional U.S. housing finance, according to the Wall Street Journal.
Mortgage lender Better Home & Finance Holding Co. and crypto exchange Coinbase are teaming up to allow home buyers to pledge Bitcoin or the USDC stablecoin to secure a down payment on a Fannie Mae-conforming mortgage.
While crypto-backed mortgages have existed in limited forms, Fannie Mae’s involvement—through loans it will purchase and guarantee—could bring such arrangements into the mainstream of the $12 trillion U.S. mortgage market.
The Journal has more details:
The new mortgage product works like this: A home buyer gets a traditional 15- or 30-year Fannie-backed mortgage from Better. Instead of making a cash down payment, the buyer gets a separate loan, backed by either bitcoin or USDC, a popular stablecoin.
Paying interest on a second loan instead of making a cash down payment can increase the overall cost of homeownership significantly. The interest rate on both loans would range from comparable to typical Fannie Mae mortgages to 1.5 percentage points higher.
“A lot of those crypto owners and investors have not been able to become homeowners,” because they don’t want to sell their crypto investments, said Max Branzburg, Coinbase’s head of consumer and business products. “We haven’t really had the best way to service that need.”
The development comes as the Trump administration moves to enact regulation aimed at establishing the United States as the number one destination for building crypto companies.
Speaking in January at the World Economic Forum, President Trump said he helped secure America’s place as the “crypto capital of the world” by backing legislation aimed at boosting the digital asset industry.
Trump touted his signing of a “landmark GENIUS Act” last year, focused on stablecoins, partly to gain political support and partly to keep China from leading the space.
"China wanted that market too," the president told attendees. "We have to make it so that China doesn't get the hold of it. It's just like they want the AI, and we've got that market, I think, pretty well locked up."