Fannie Mae Introduces Crypto-Backed Mortgages
- Fannie Mae will accept mortgages backed by Bitcoin and USDC for the first time.
- The program is a partnership between Coinbase and Better Home & Finance, a Fannie Mae-approved lender.
- Borrowers can avoid selling crypto, thus not triggering taxable events, but mortgage rates will be higher by about 0.5-1.5 percentage points compared to standard loans.
- There are no margin calls on these loans, even if Bitcoin’s value decreases, with liquidation risk only after a payment delinquency of over sixty days.
This new initiative allows home buyers to use their digital assets as collateral without selling them, providing an innovative financial option in the housing market. The collaboration between Coinbase and Better Home & Finance marks a significant step in integrating cryptocurrency into traditional finance systems.
By enabling crypto-backed mortgages, Fannie Mae is expanding its offerings while accommodating the growing interest in digital assets as part of broader institutional adoption strategies.(Source)
