Fannie Mae to Accept Crypto-backed Mortgages for the First Time

The new offering is being introduced through a partnership between mortgage originator Better Home & Finance and crypto exchange Coinbase Global. The product allows borrowers to pledge holdings such as bitcoin or the stablecoin USDC as collateral tied to their down payment, rather than liquidating those assets to generate cash.

Fannie Mae’s involvement is pivotal. As a government-backed entity overseen by the Federal Housing Finance Agency (FHFA), Fannie plays a central role in the secondary mortgage market, purchasing loans from lenders and packaging them into securities with a federal guarantee. Its underwriting standards are widely adopted across the industry. As a result, its acceptance of crypto-backed structures is expected to accelerate broader market adoption.

The policy shift follows direction from FHFA leadership. In June, FHFA Director Bill Pulte instructed Fannie Mae and its sister entity Freddie Mac to prepare to recognize cryptocurrency as an asset in mortgage applications, reflecting a more permissive federal stance toward digital assets. That directive aligned with broader support for the crypto sector within the Trump administration and laid the groundwork for incorporating crypto into federally backed housing finance.

Under the new structure, borrowers still take out a traditional 15- or 30-year Fannie-backed mortgage through Better. However, instead of making a conventional cash down payment, they simultaneously obtain a separate loan secured by their crypto holdings. This effectively allows buyers to retain exposure to digital assets while leveraging them to access home financing.

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The structure introduces additional cost considerations. Because borrowers are servicing two loans, interest expenses can rise materially. According to the report, rates on the combined financing could run as much as 1.5 percentage points higher than standard Fannie Mae mortgages.

Operationally, pledged crypto assets are locked and cannot be traded for the duration of the arrangement. Notably, declines in the value of the underlying crypto collateral do not automatically trigger changes to the mortgage terms, provided borrowers remain current on their payments.

The product is designed to address a specific friction point in the housing market: crypto-rich but cash-constrained buyers. Industry data suggests a growing cohort of prospective homeowners hold substantial digital assets but are reluctant to liquidate them, either to avoid capital gains taxes or to maintain market exposure. Coinbase executive Max Branzburg noted that many such investors have historically been unable to transition into homeownership under traditional lending frameworks.

While crypto-backed mortgages have existed in niche form, including offerings from firms such as Miami-based Milo, Fannie Mae’s entry is expected to legitimize and scale the model, per the Journal. Previous products have attracted a limited customer base, often resembling foreign buyers with significant assets but nontraditional income or credit profiles.

The broader market context underscores both opportunity and risk. Approximately 14% of U.S. adults owned cryptocurrency as of 2025, though asset values have shown significant volatility, with bitcoin declining more than 40% from recent peaks. At the same time, surveys indicate that a meaningful share of younger homebuyers have already tapped crypto holdings to fund purchases.

By incorporating crypto into federally backed mortgage pipelines, regulators and housing finance institutions are effectively acknowledging digital assets as part of household balance sheets. Whether that recognition leads to systemic expansion or introduces new risk dynamics will depend on how widely such products are adopted and how regulators refine oversight in response.