""Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional down payment," said Max Branzburg, head of consumer and business products at Coinbase."
"The goal of the product is also to help those who might be crypto-rich but cash-poor. The homebuyer would take out a traditional 15 or 30-year mortgage but instead of making down payment in cash, they would take out a separate loan backed by their Bitcoin or stablecoin holdings."
"The downside is that the second loan would increase the overall cost of homeownership since the buyer would also have to service that second loan."
"Gen Z and Millennials say that 25% of their portfolio is in non-traditional assets like crypto, and 73% of people in these generations say it is harder for them to build wealth by traditional means."
Fannie Mae has partnered with Better Home & Finance and Coinbase to accept crypto-backed mortgages, enabling homebuyers to use digital assets as collateral for down payments. This initiative targets younger generations who often own cryptocurrencies but struggle with traditional savings. Homebuyers can secure a mortgage while retaining their crypto assets, avoiding capital gains taxes. However, they must service a second loan, increasing overall homeownership costs. The product addresses the financial challenges faced by Gen Z and Millennials, who increasingly invest in non-traditional assets like crypto.
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