Better and Coinbase Bitcoin Home Financing Requires Collateral Worth 250% of Down Payment Loan
Key Facts
Coinbase requires pledged bitcoin to be worth at least 250% of the down payment loan under a home financing product it announced a partnership to launch with Better on March 26, 2026. The structure allows digital asset holders to finance their down payment by pledging their holdings as collateral for a separate loan alongside a conventional home mortgage, according to Better's explanation of the product. The financing thus consists of two obligations: the mortgage on the property and the loan providing the funds needed for the down payment to buy it. Collateral for the down payment loan is not limited to the cryptocurrency pledged by the borrower, but also includes a second lien on the home itself, according to the company. Coinbase said the two loans carry the same interest rate and amortization term, aligning those two conditions across the financing obligations tied to the purchase. The borrower repays both through a single monthly payment, an arrangement combining the amounts due on the mortgage and the down payment loan. Eligibility to apply for the product requires U.S. residency and a verified Coinbase account in good standing, according to the platform's terms.
The collateral requirements link the amount of financing sought for the down payment to the value of the bitcoin the borrower pledges against that loan, according to Coinbase's help page. The 250% minimum applies specifically to the down payment loan, the portion secured by digital assets and a second lien on the home within the financing structure. Once collateral is pledged, bitcoin price movements alone do not require the borrower to post additional collateral, according to the product terms announced by Better. The company said in its partnership launch statement: "Market movements alone never trigger liquidation," setting out how collateral is treated when the pledged asset's price fluctuates. However, the crypto collateral becomes subject to liquidation when payments are 60 days overdue, according to the same statement, linking that risk to a failure to make payments. Keeping up with monthly payments therefore remains important to the fate of the assets pledged as collateral, even without automatic liquidation triggered by market movements alone.
On the regulatory front, Bill Pulte directed Fannie Mae and Freddie Mac to prepare a proposal to count cryptocurrency among reserve assets when assessing household mortgage risk, a directive covered in reports published in June 2025. The proposal concerns considering borrowers' holdings when assessing their mortgage financing risk, while Better's mechanism uses cryptocurrency as collateral for the down payment loan. Pulte said, according to Reuters, that considering additional borrower assets could help assess their full financial position, linking this to the goal of "facilitating sustainable homeownership for creditworthy borrowers." Fannie Mae's general guide allows virtual currencies to be used for down payments, purchase closing costs and financial reserves after conversion into U.S. dollars. Acceptance of these funds depends on meeting the verification requirements set out in the guide, as well as converting the holdings into dollars before using them for those purposes. By contrast, senators warned in a letter concerning Pulte's directive of the risks of expanding underwriting standards to include unconverted crypto assets. They said such an expansion could pose risks to the stability of the housing market and financial system, in an objection focused on including those holdings in loan assessment criteria.
The use of digital assets to finance home purchases comes amid a decline in U.S. housing contract activity in September 2026, according to pending home sales figures reported by Reuters. The pending home sales index fell 7.3% from the previous month to 66.0 points, reflecting the monthly contraction in activity during September. Pending home sales fell 11.3% from the same month a year earlier, recording declines on both a monthly and annual basis. In construction, privately owned housing starts reached a rate of 1,221,000 units in September, according to the U.S. Census Bureau and the Department of Housing and Urban Development. That figure is a seasonally adjusted annual rate of construction starts during the month, while the pending sales figures concern contracts to purchase homes. The Federal Reserve Bank of St. Louis calendar lists October 27, 2026, as the release date for the S&P Cotality Case-Shiller Home Price Indices. The Federal Open Market Committee also holds its next meeting on October 27 and 28, 2026, according to the Federal Reserve's official calendar.