Per a Wall Street Journal report, $4.3 trillion mortgage provider Fannie Mae will begin accepting crypto-backed mortgages. Indeed, Fannie Mae will soon accept the new type of mortgages, which are a new product from Better Home & Finance and Coinbase Global that allows home buyers to pledge crypto.
Borrowers can pledge bitcoin or USDC as down payment collateral without selling assets or triggering a taxable event. The loans carry no margin calls, and bitcoin price drops alone cannot trigger liquidation or require additional collateral. Additionally, the loans will be issued as conforming mortgages backed by Fannie Mae. That means they will follow the same standards and protections as traditional home loans.
For many in the market, Fannie’s involvement adds credibility that earlier crypto mortgage products lacked, setting the precedent for more crypto-based major transactions in the future outside of home-buying.
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“A lot of those crypto owners and investors have not been able to become homeowners,” because they don’t want to sell their crypto investments, said Max Branzburg, Coinbase’s head of consumer and business products. “We haven’t really had the best way to service that need.”
Coinbase’s head of consumer and platform business development, Mark Troianovski, also framed the offering as democratizing access to a strategy long reserved for the ultra-wealthy. “People who are sitting on Bitcoin or USDC can put a roof over their head without needing to sell it, without needing to incur capital gains. We are giving people access to housing in a way that is very similar to how private bankers serve some of the wealthiest customers.”