For the first time, Fannie Mae will allow mortgages to be backed by crypto
Fannie Mae, the government-backed mortgage finance giant, will start accepting mortgages backed by cryptocurrencies — namely bitcoin and Circle’s stablecoin, USDC.
Mortgage firm Better Home & Finance and US-based crypto exchange Coinbase Global are rolling out a new product that enables prospective homebuyers to pledge their digital assets as down payment collateral when obtaining a mortgage backed by Fannie Mae, The Wall Street Journal reported.
This means homebuyers can secure a standard conforming mortgage without liquidating tokenized assets, which potentially triggers a taxable event.
“If BTC drops in value, the mortgage terms remain unchanged, and no additional collateral is required. Market movements alone never trigger liquidation,” per a joint press release from Better and Coinbase.
“Token-backed mortgages originated by Better are designed in accordance with Fannie Mae guidelines and remain as standard conforming mortgage loans, identical to other conforming mortgages,” the announcement continued.
Max Branzburg, head of consumer and business products at Coinbase, said, “Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional downpayment.”
The announcement comes more than nine months after William Pulte, the director of the Federal Housing Agency, ordered Fannie Mae and Freddie Mac to prepare a proposal that considers cryptocurrency as a reserve asset in single-family mortgage loan risk assessment.
This means homebuyers can secure a standard conforming mortgage without liquidating tokenized assets, which potentially triggers a taxable event.
“If BTC drops in value, the mortgage terms remain unchanged, and no additional collateral is required. Market movements alone never trigger liquidation,” per a joint press release from Better and Coinbase.
“Token-backed mortgages originated by Better are designed in accordance with Fannie Mae guidelines and remain as standard conforming mortgage loans, identical to other conforming mortgages,” the announcement continued.
Max Branzburg, head of consumer and business products at Coinbase, said, “Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional downpayment.”
The announcement comes more than nine months after William Pulte, the director of the Federal Housing Agency, ordered Fannie Mae and Freddie Mac to prepare a proposal that considers cryptocurrency as a reserve asset in single-family mortgage loan risk assessment.
