Fannie Mae to Accept Crypto-Backed Mortgages

Fannie Mae, a key player in the U.S. mortgage market, announced plans to accept cryptocurrency-backed mortgages for the first time, enabling home buyers to use Bitcoin or the USDC stablecoin as collateral for down payments. The initiative, developed through a partnership between cryptocurrency exchange Coinbase and Fannie Mae-approved lender Better Home Finance, allows borrowers to leverage their digital assets without selling them, according to details first reported by the Wall Street Journal.

Under the program, prospective buyers transfer their crypto holdings from Coinbase to a secure custody wallet managed by Better Home Finance, where they retain ownership. This structure avoids triggering taxable events associated with selling cryptocurrency. For holders of USDC, a dollar-pegged stablecoin, the assets can continue generating rewards while serving as collateral. The mortgages will feature interest rates 0.5 to 1.5 percentage points higher than those for standard 30-year loans, varying based on individual borrower profiles, a Coinbase spokesperson said.

A distinctive aspect of these loans is the absence of margin calls, unlike many crypto lending products. If the value of...