economy
Fannie Mae accepts first crypto-backed mortgage product
Better Home and Finance is partnering with Coinbase on a crypto-backed mortgage that conforms to Fannie Mae guidelines.
TL;DR
- Fannie Mae will now accept crypto-backed mortgages through a partnership between Better Home and Finance and Coinbase.
- This product allows homebuyers to use cryptocurrency like Bitcoin and USD Coin as collateral for down payments.
- Borrowers can secure a mortgage without selling their crypto assets, thus avoiding taxes and potential future gains.
- The system involves a regular mortgage with Better and a second loan backed by crypto, with both loans held by Better.
- Pledged crypto assets cannot be traded and remain in custody; their value fluctuations do not affect the loans.
- While this involves interest on two loans, Better claims competitive rates and potential yield offsets from stablecoins.
- This offering is the first to be accepted by Fannie Mae, potentially paving the way for more tokenized asset-based financial products.
- Coinbase One members may be eligible for a rebate on mortgage value.