The Federal National Mortgage Association, commonly known as Fannie Mae, is reportedly set to accept Bitcoin (BTC) mortgages for the first time.
Specifically, mortgage lender Better Home & Finance, together with the Coinbase crypto exchange, plans to unveil a new mortgage product today, March 26, allowing homebuyers to pledge their crypto holdings to secure a Fannie-backed loan, as reported by WSJ.
Although crypto-backed mortgages already exist, Fannie Mae’s participation could push the concept further into the mainstream, as the institution operates with federal backing and is overseen by the Federal Housing Finance Agency.
Fannie Mae brings crypto mortgages
When applying for loans, borrowers will be able to pledge Bitcoin or USD Coin (USDC) as collateral to cover their down payment. As the new product is structured as a conforming loan, it follows the same standards and protections as traditional mortgages.
If a borrower already holds crypto on Coinbase, the process is, of course, simplified. Namely, instead of liquidating assets, traders on the exchange can transfer their digital holdings from the exchange into a custody wallet while retaining ownership rights.
Importantly, the new token-backed loans will not involve margin calls or requests for additional collateral if crypto prices fall, as per the aforementioned report. Accordingly, even if the value of BTC declines, the mortgage terms remain unchanged, and market fluctuations alone will not trigger liquidation. Collateral would only be at risk if a borrower becomes 60 days delinquent on payments.
Bitcoin price falls
Despite the announcement, Bitcoin price pulled back 3.14% on the daily chart, trading at about $69,410, closely mirroring a broader market pullback of roughly 3.07%.
The decline appears largely tied to macro pressures and institutional selling, with institutional outflows and risk-off sentiment emerging as the main drivers. Additional pressure came from derivatives markets, where about $61.7 million in Bitcoin liquidations were recorded over the past day, mostly in long positions.
If Bitcoin holds above $69,400, though, a rebound toward around $71,300 could be possible. Conversely, while a break below $69,000 raises the risk of a move down to roughly $67,800. In the long term, however, analysts appear optimistic about ‘digital gold.’
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