The richest Americans have spent years using a tax trick called Buy, Borrow, Die, where they borrow against their stocks instead of selling them.
Fannie Mae is about to bring that strategy to anyone with bitcoin and a job.
Fannie Mae, the government-backed company that funds most US home loans, said it will begin accepting bitcoin and the stablecoin USD Coin (USDC) as collateral for conventional mortgages, the most common type of home loan in the country.
The first product comes from a partnership between mortgage lender Better and crypto exchange Coinbase, with Better CEO Vishal Garg telling Yahoo Finance the official rollout is in June while some loans are already being processed. A waitlist is open for early interest.
The structure is effectively a zero-down mortgage, with two loans wrapped into one - the regular mortgage, plus a down payment loan backed by crypto - so borrowers see a single rate, term, and monthly payment.
The collateral math is simple: to get a $100,000 down payment loan, a borrower needs to pledge $250,000 in bitcoin or $125,000 in USDC, while Coinbase One members get a lender credit of 1% of the mortgage, up to $10,000.
Investors who have held bitcoin for years can now turn that position into a house without selling and triggering a tax bill, which is the whole point of the product.
Garg pointed to a missing-money problem to explain the demand, saying 41% of Better's customers walked away from a home because they could not assemble a down payment. Crypto-backed mortgages turn a wallet that has been sitting idle into a key.
It also opens a much larger door, with US households holding about $35 trillion in stocks and bonds while keeping only about $5 trillion in checking and savings accounts. Today, only that $5 trillion counts toward a down payment.
Garg said Better is already working with major US companies to let employees borrow against their stock to buy a home, with tokenized versions of Amazon, Tesla, and S&P 500 ETFs already on his roadmap.
The structure includes a serious cushion. Better says bitcoin price volatility does not trigger margin calls or top-up requirements as long as borrowers stay current on payments, with collateral only at risk of liquidation in the event of a 60-day payment delinquency, similar to a conforming mortgage default.
There is also a parallel market for higher-end borrowers, with Miami-based Milo crossing $100 million in crypto mortgage originations, including a $12 million loan, while offering 100% financing with no income documentation.
Founder Josip Rupena says many of his clients have huge net worth but no traditional income. In English: they are crypto-rich and paycheck-poor, which is exactly the borrower Wall Street has not been able to serve before.
The June rollout is the real test. If take-up is high, expect tokenized stocks to follow as the next form of accepted collateral, building on Garg's plan to use tokens of major US equities as down payment fuel.
Crypto just became part of the housing market.
