First US-backed mortgage uses Bitcoin as collateral

The first conventional mortgage backed by the U.S. government and secured by Bitcoin has been completed, marking a significant step in integrating digital assets into mainstream housing finance. The transaction involved a couple from Ann Arbor, Michigan, who used Bitcoin as collateral for their home down payment through a partnership between cryptocurrency exchange Coinbase and mortgage lender Better.

The product, first announced in March, allows qualified borrowers to pledge Bitcoin or the USDC stablecoin as collateral for a loan that funds a mortgage down payment, without requiring them to sell their digital assets. This structure is designed to let borrowers retain exposure to their cryptocurrency investments while accessing traditional home financing. The mortgage itself is a standard, fixed-rate loan backed by government-sponsored enterprise Fannie Mae.

Coinbase provides the custodial infrastructure for the crypto assets, while Better originates and services the mortgage. According to the companies, the crypto collateral remains in a custodial account for the loan's duration and is returned upon repayment. They state that ordinary market volatility will not trigger margin...