Crypto-Backed Mortgages Expand Homebuying Options

A new type of mortgage product has emerged that allows homeowners to use cryptocurrency as collateral for home loans. This development is being hailed as a major step forward for crypto's real-world utility.

The product is being offered by Better Home & Finance (BETR) and Coinbase (COIN), and will be backed by Fannie Mae, the government-sponsored Federal National Mortgage Association.

This means that homeowners who hold large amounts of cryptocurrency can use it as collateral for a home loan without having to sell their assets. However, there are risks involved for both the lender and the borrower.

The structure of the mortgage product consists of two loans: one for the home and one for the down payment. Crypto is only used in the second case, which means Fannie Mae isn't exposed to crypto risk.