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Coinbase and Better Mortgage have made their Bitcoin-backed home financing product generally available to eligible Coinbase One members in the U.S., allowing borrowers to pledge BTC for a down payment loan without selling it.
The product became available August 12 following an early-access rollout. Better originates and services the mortgage and down payment loan, while pledged Bitcoin is held in Better’s custodial account on Coinbase.
Borrowers Must Pledge Bitcoin Worth 250% of Down Payment Loan
The structure combines a traditional mortgage with a separate loan that funds the cash down payment and is secured by Bitcoin and a second lien on the home.
Borrowers must initially pledge BTC worth at least 250% of the down payment loan. A $100,000 loan would therefore require $250,000 in Bitcoin collateral.
Better says declines in Bitcoin’s price alone will not trigger margin calls or require borrowers to add collateral. The BTC remains in custody until the required debt is repaid.
Better Can Liquidate Pledged BTC After 60 Days of Delinquency
Payment defaults can still put the collateral at risk. Better says it may liquidate pledged Bitcoin if a borrower remains delinquent for 60 days.
Bitcoin is the only crypto asset accepted at launch. Applicants must also meet Better’s credit, income, and other underwriting requirements.
Waitlist Represented More Than $260M in Projected Loan Volume
Coinbase and Better opened a waitlist in June that represented more than $260 million in projected loan volume before the wider rollout.
Approved Coinbase One members can also receive a lender-funded credit equal to 1% of the mortgage value, capped at $10,000.
