Coinbase and Better Home Launch Crypto-Backed Mortgages with 1% Rebate Up to $10,000
Coinbase and Better Home & Finance launched the 'Token-Backed Mortgage' allowing borrowers to pledge Bitcoin or USDC as collateral for a Fannie Mae-conforming loan down payment without liquidation risk except after 60-day delinquency. Coinbase One members receive a 1% rebate on mortgage amounts up to $10,000 to cover closing costs.
1. Token-Backed Mortgage Launch
Coinbase and Better Home & Finance introduced the Token-Backed Mortgage, marking the first U.S. conforming loan that accepts cryptocurrency as collateral. The product enables borrowers to fund their Fannie Mae-conforming mortgage down payment using Bitcoin or USDC without liquidating assets.
2. Product Mechanics and Collateral Terms
Borrowers receive two separate loans: a Fannie Mae standard mortgage for the home and a private loan from Better Home to finance the down payment with crypto collateral. Assets remain untouched unless borrowers miss payments for 60 days, after which collateral liquidation can occur.
3. Coinbase One Rebate and Risk Considerations
Coinbase One subscribers earn a 1% rebate on the crypto loan amount, capped at $10,000, to offset closing costs. The product exposes lenders and borrowers to cryptocurrency volatility, underscoring potential risks from significant price swings.