Homebuyers holding cryptocurrency may now have a new way to finance property purchases in the United States, as digital assets begin to find a place in traditional mortgage lending.
According to a statement released on Thursday, housing giant Fannie Mae will accept cryptocurrency as collateral for down payments through a new partnership between mortgage company Better Home & Finance and crypto exchange Coinbase, Fortune reported.
The move enables borrowers to leverage their crypto holdings without selling them outright. Under the partnership, eligible customers can pledge their digital assets held on Coinbase accounts to support mortgage applications processed by Better, marking the first time Fannie Mae has accepted crypto-based collateral in the home loan process.
Making home ownership more accessible for young people The new policy aims to make home ownership more accessible to younger people, who are more likely to own digital assets such as Bitcoin, Ethereum, Solana and others.
“Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional down payment,” Max Branzburg, head of consumer and business products at Coinbase, told Fortune.
The rationale for launching such a product is to help individuals who may hold significant wealth in cryptocurrency but lack sufficient liquid cash for a home purchase. Under the model, the homebuyer would take out a traditional 15 or 30-year mortgage, but instead of paying the down payment entirely in cash, they could secure a separate loan backed by their Bitcoin or stablecoin holdings.
This new offering would also allow them to hold onto their crypto without having to sell it and pay capital gains taxes.
However, there is a downside to the trade-off — the second loan would increase the overall cost of owning a home, since the buyer would also have to service it.
What happens to the pledged crypto units? Once a homebuyer pledges their crypto assets, they can't trade them on the exchange. If the digital assets decline in value, the mortgage loans won't be affected if the owner keeps making the monthly payments, the report said.
The product arrives at a time when more young people are turning to crypto to build wealth rather than relying solely on traditional financial assets.
Gen Z and Millennials say 25% of their portfolio is in non-traditional assets like crypto, and 73% of people in these generations say it is harder for them to build wealth through traditional means, according to a recent report by Coinbase.
Bitcoin has been under severe pressure since the onset of the US-Israel conflict with Iran, shedding roughly 20%, amid the rising risk-off sentiment among investors. The downturn has highlighted the limitations of the long-standing view within crypto circles that Bitcoin can reliably function as a safe-haven asset during periods of crisis.