Better Mortgage launches Bitcoin‑backed down‑payment loans without margin calls

Better Mortgage and Coinbase announced that their token‑backed conforming mortgage product is now generally available. The offering lets qualified borrowers obtain a traditional first mortgage and a separate down‑payment loan secured by pledged Bitcoin.

How the product works

Borrowers receive a standard first mortgage that meets Fannie Mae guidelines. A second loan provides cash for the down payment and is secured by Bitcoin placed in Better Mortgage’s custodial account on Coinbase Prime, along with a second lien on the property.

Collateral terms

• Bitcoin is advanced at a 40% rate, meaning $250,000 of BTC can support a $100,000 down‑payment loan.
• The advance rate may change without notice.
• Borrowers cannot sell, transfer, re‑pledge, or otherwise encumber the pledged Bitcoin without written consent.

Risk profile

Unlike typical crypto margin loans, daily price movements do not trigger margin calls. Liquidation is tied to payment delinquency:

1. Delinquency begins the day after a missed payment.
2. Borrowers have 30 days to cure the default.
3. If delinquency persists for 60 days, Better may liquidate the pledged Bitcoin.

A forced sale could eliminate future upside and may create a taxable event. The second lien also gives the down‑payment lender a secured claim against the home.

Eligibility requirements

• U.S. borrowers with a verified Coinbase account.
• Minimum 680 FICO score.
• Compliance with Better’s underwriting and conforming‑loan criteria.
• Residence in an eligible jurisdiction (specific states not disclosed).

Roles of Better and Coinbase

Coinbase provides the custodial and Prime infrastructure for the Bitcoin transfer but does not originate or service the loans. Better Mortgage handles application, underwriting, closing, and ongoing loan servicing.