Fannie Mae To Accept Crypto, Bitcoin As Loan Collateral In Coinbase Tie-Up
Fannie Mae will soon allow loans financed by cryptocurrency holdings, an important change that reflects the growing clarity of regulations in the United States and paves the way for owners of digital assets to use non-traditional assets as part of the home buying process.
Crypto Down Payment Options For Fannie Mortgages
Thursday, Better Home & Finance and Coinbase announced a joint mortgage product that allows potential buyers to pledge crypto as collateral for a down payment on a loan financed by Fannie Mae instead of selling their digital assets for cash.
The offering is structured in such a way that pledged holdings – such as Bitcoin (BTC) or Circle’s USDC stablecoin held in a Coinbase account – secure a separate loan to fund the down payment; the home mortgage itself remains a conventional loan backed by Fannie.
Founder and CEO of Better Home & Finance, Vishal Garg, framed the partnership as a way to expand access to home ownership:
Better was founded to make home ownership more accessible to all Americans, and this partnership with Coinbase presents a new way to achieve the American Dream for the 52 million Americans who own digital assets.
Coinbase, in its announcement, described the product as the first “AI-native” mortgage lender that combines digital-assets loans and a major crypto exchange platform to hedge digital wealth and traditional real estate funds.
Not Affected by Bitcoin Price Changes
Coinbase representatives stressed that, once operational, the terms of the loan and the interest will work like a regular loan and will not be affected by Bitcoin price fluctuations.
Coinbase also noted its ongoing engagement with policy makers. “We are maintaining an active, bipartisan dialogue with Washington,” said A company representative, adding that the product aims to increase home ownership opportunities for Americans whose wealth is tied to digital assets rather than traditional bank accounts.
At the time of writing, the crypto exchange’s stock, which trades under the symbol COIN, is worth $176 per share. This extended the decline, which saw the price drop from $200, the opening price at the beginning of this week’s trade.
Featured image from OpenArt, chart from TradingView.com
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