For those who prefer to use cryptocurrency and are looking to buy a home, there’s good news.
In March, Fannie Mae announced that it will start accepting crypto-backed mortgages as Better Home & Finance Holding Co. plans to roll out a program this year in partnership with crypto trading platform Coinbase. It’s the first one backed by the congressionally chartered, shareholder-owned company that provides stability and affordability to the U.S. housing market.
Former U.S. Sen. Pat Toomey hailed the move as a way to make homeownership easier for first-time buyers.
“Pennsylvania families know the path to homeownership has never been easy,” Toomey, an Upper Milford Township resident who represented the Lehigh Valley as a member of the U.S. House of Representatives before being elected to the Senate, wrote to The Morning Call.
“But for today’s first-time buyers, it has become nearly impossible. Rising prices and tightening credit standards have put homeownership out of reach for young Pennsylvanians who have done everything right — just in a different form than the system recognizes.”
Toomey, a Republican, retired from the Senate in 2023. Afterward, he worked in the private equity and crypto industries, serving as an adviser to Coinbase.
Toomey said the housing finance system was built for a different era, where wealth meant cash savings and a credit trail. He added that millions of Americans “have accumulated meaningful assets in digital form, yet they count for nothing when they sit down with a lender.”
“I spent years on the Senate Banking Committee pushing for smarter financial regulation, and I believe we can expand access without putting financial stability at risk,” Toomey wrote.
Even before the announcement, a small number of buyers were using crypto to back a mortgage. The National Association of Realtors found the number to be 1% of homebuyers in 2024, though the number grew to 12% when it only included younger buyers.
How it works
According to a news release from Coinbase, crypto-backed mortgages function like a conventional home loan, with the same legal protections. Borrowers can pledge their crypto holdings as collateral for a separate loan that’s used to cover the down payment.
Eligible cryptocurrencies are Bitcoin and USDC, a type of cryptocurrency typically bought and sold for $1.
The buyer gets two loans at closing. The first is a standard Fannie Mae mortgage on the home. The second is used to fund the cash down payment, and is secured by the crypto pledged by the buyer.
Coinbase said both loans share the same interest rate and amortization term and require only a single monthly payment. For example, on a $500,000 home, a borrower could pledge $250,000 in bitcoin and get a $100,000 loan to cover the down payment.
The crypto would remain in Better’s Coinbase Prime account for the life of the loan and would not be affected by Bitcoin’s price volatility.
Better Home & Finance Holding said the crypto-backed mortgage is designed in accordance with Fannie Mae guidelines and is guaranteed by the mortgage giant. That makes it eligible for lower interest rates than those of other crypto-backed loans.
“This opens a door that didn’t exist before. It’s also a sign of how financial innovation can unlock economic opportunity in communities across Pennsylvania and beyond,” Toomey said.
Morning Call reporter Evan Jones can be reached at ejones@mcall.com.
