Fannie Mae, the government-sponsored enterprise that backs a significant portion of U.S. mortgages, revealed that it will allow crypto-backed mortgages for the first time. Fannie Mae has collaborated with Coinbase to create a system that enables borrowers to utilize digital currency (e.g., Bitcoin, Ethereum) as part of the total down payment requirement as collateral for home loans, potentially unlocking billions in crypto wealth for real estate financing.
How Crypto-Backed Mortgages Will Function
Under the crypto-backed mortgage program, qualified borrowers can pledge digital assets held in qualified custody solutions as collateral, rather than liquidating holdings to meet down payment or reserve requirements. Coinbase will provide custody, compliance infrastructure, and secure verification of the borrower’s crypto assets (including both the overall amount and the historic transaction activity) to ensure the client’s compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations.
Lenders will consider the borrower’s crypto account, in conjunction with their traditional credit report, proof of income, and debt-to-income ratio, for the purpose of approving a mortgage application. If the process goes well and is approved, the assets will remain under custody, serving as security and preserving exposure to potential appreciation.
The pledged crypto asset and its dollar-related value will be based on a fair average of the 30-day price on the day of valuation, thus reducing the impact of market volatility. This approach will safeguard borrowers from missing out on potential increased value, while also protecting the financial institution from losses caused by crypto price fluctuations.
Significance of this Change
This initiative removes a major barrier for any person actively involved or working within the crypto space by providing an opportunity to purchase homes using their holdings as collateral and providing them with liquidity to participate in future real estate purchases, as well as having access to funds through their existing relationship(s) with traditional financial institutions (banking). This is a major sign of growing acceptance of crypto as legitimate collateral across different financial sectors.
This initiative has already been tested and implemented in Australia, but through the Sydney-based fintech, Block Earner, in October 2025, launching the first-ever crypto collateralized home loans. Hopefully, as the crypto industry consolidates, it will open more home ownership opportunities in other jurisdictions.
