Coinbase, Better launch Bitcoin-backed home loans

Coinbase and Better Mortgage have made a Bitcoin-backed mortgage product generally available to qualified US homebuyers, allowing them to secure a down payment loan without selling their BTC. Summary Borrowers must pledge Bitcoin worth at least 250% of the loan down payment. Better combines a Fannie Mae-backed mortgage with a separate Bitcoin-secured loan. Bitcoin price declines alone will not trigger margin calls or alter the loan terms. Better may liquidate the collateral when a borrower falls 60 days behind on payments. Bitcoin-backed home loans use a two-loan structure Better Mortgage and Coinbase announced the rollout on Aug. 26, opening the product after testing it with a limited group of borrowers. Better originates and services the loans, while Coinbase provides the infrastructure used to transfer and hold the Bitcoin collateral. Rather than creating one mortgage secured partly by a home and partly by cryptocurrency, the companies have divided the financing into two loans. One is a standard first-lien mortgage designed to meet Fannie Mae’s conforming guidelines. A separate loan, secured by the borrower’s Bitcoin, supplies the cash needed for the down payment. Both loans car...