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BTC 
ETH Bitcoin enters U.S. real estate credit
Today, in the United States, people can use Bitcoin to finance home purchases without having to sell it. Better Mortgage and Coinbase have just officially launched a real estate loan product backed by digital assets. Bitcoin serves as collateral and can be used to make a down payment on a house purchase. Homeowners can still retain exposure to Bitcoin during the loan period.
In short
Better and Coinbase are promoting bitcoin-backed real estate loans to the mass market. Bitcoin can replace a cash down payment and does not need to be sold. The amount of potential loans currently on the waiting list exceeds $260 million.
Bitcoin enters U.S. real estate credit
The project was launched months ago. The United States has previously moved to include cryptocurrencies in the evaluation system for real estate loans. Coinbase and Better are now entering the commercialization phase. The product is aimed at eligible Better customers and allows them to use bitcoin as collateral to pay the down payment required for a home purchase without selling bitcoin. For example, a buyer with $250,000 in bitcoins can get up to $100,000 for a down payment. Better requires that the value of crypto collateral be at least 250% of the loan amount used for the down payment.
These bitcoins are then transferred to Better's escrow account on Coinbase Prime and retained until the loan is repaid or re-financed. After the loan is repaid, Bitcoin will be returned in accordance with the terms of the contract.
Two loans behind the same house
The plan does not simply hand over Bitcoin to a bank in exchange for a mortgage. It is actually a combination of two loans. The first was a traditionally qualified mortgage that followed Fannie Mae's rules. The second payment was used for a down payment and used Bitcoin as collateral, while the house itself was also used as a subordinated security interest. Both loans enjoy the same interest rate and amortization period, and the borrower only needs to make one payment per month. Better is responsible for issuing and monitoring loans, and Coinbase mainly provides the infrastructure for transferring and holding Bitcoin as collateral.
This model brings Bitcoin closer to traditional credit. Previously, JPMorgan Chase has begun accepting Bitcoin and Ethereum as collateral for some institutional loans. This time, the product is targeted at individuals who want to buy their own homes. In addition, Coinbase One members also receive discounts: Eligible members receive a credit line equivalent to 1% of the loan amount to cover transaction fees, up to a maximum of $10,000.
More than US$260 million has been queued
Better and Coinbase have opened waiting lists before the product is fully launched. The initial numbers are impressive: 76% of registered users are already Coinbase One members, and 60% plan to buy a house within six months. Total loans are expected to exceed US$260 million. Better also pointed out that this is a larger market-about 52 million Americans own digital assets, but not everyone plans to buy a house tomorrow, and not everyone is eligible.
Bitcoin still faces a well-known problem as collateral: its price could fall significantly. Borrowers choose to retain exposure to Bitcoin rather than sell it when buying a house, and therefore bear the corresponding risk. Despite this, bitcoin-backed loans are still growing. A recent report estimated that the market size of bitcoin-backed loans could reach US$1 trillion in the future. Coinbase and Better now give it a very specific use: buying a house. Bitcoin replaces the check for the down payment.
