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Crypto Revolution: Coinbase Partners with Fannie Mae to Offer Crypto-Backed Mortgages

In a groundbreaking development, Coinbase has teamed up with Fannie Mae and Better Home & Finance to pioneer crypto-backed mortgages.

This new program allows homeowners to use Bitcoin or the USDC stablecoin as collateral for down payments, effectively integrating digital assets into the real estate market.

Borrowers can transfer their cryptocurrency from Coinbase to a custody wallet at Better while maintaining ownership, thus bypassing potential taxable events.

Mortgage rates for these loans will be approximately 0.5 to 1.5 percentage points higher than conventional 30-year loans, based on the borrower’s profile.

Significantly, these loans won't trigger margin calls; if the value of Bitcoin declines, the mortgage terms remain unchanged.

Liquidation risk for borrowers is only present after a 60-day payment delinquency, mirroring traditional mortgage protocols.

The initiative addresses a crucial gap, as nearly 41% of American families struggle to afford home down payments despite having savings in crypto.

Mark Troianovski from Coinbase noted that this approach allows individuals to access housing without selling their digital assets and incurring capital gains tax.

As more major lenders show interest in crypto integration, this partnership could reshape the landscape of mortgage financing.

Overall, Coinbase and Fannie Mae's collaboration signals a notable shift towards the acceptance and utilization of cryptocurrencies in everyday financial transactions.