Crypto Assets Integrated into US Mortgage Financing Structure

A collaborative effort between Coinbase and Better Home & Finance has led to the launch of a mortgage structure that enables borrowers to pledge digital assets as collateral for down payments on standard conforming mortgages. This innovative approach is seen as a significant development in the use of crypto assets in US housing finance, marking a shift from their previous role as qualifying assets in underwriting.

The new mortgage structure allows borrowers to retain exposure to digital assets while using a separate loan secured by crypto holdings to cover the down payment. According to Coinbase, this setup introduces constraints tied to pledged assets, with borrowers unable to trade collateral while it is locked. Market volatility alone does not trigger margin calls as long as borrowers continue making payments, and mortgage terms remain unchanged once the loan is active.

The introduction of digital assets in mortgage financing has been gaining momentum, with lenders gradually incorporating them into their processes. Recent developments include Newrez allowing borrowers to use crypto assets as qualifying assets in underwriting and Rate launching its RateFi program, which enables verified crypto holdings to count toward reserves and income. However, borrowers are still required to convert their crypto into cash for down payments and closing costs.