Crypto-backed mortgages are hitting the mainstream. Here's how they work.

Fannie Mae will begin accepting bitcoin (BTC) and the stablecoin USD Coin as collateral for conventional mortgages, accelerating mainstream use of crypto as loan collateral. Better is partnering with Coinbase to pilot crypto-backed conventional mortgages (official rollout cited for June), combining a regular mortgage with a crypto-backed down-payment loan. Collateral rules require BTC at 250% of the down-payment loan (USDC at 125%), and Coinbase One members can get a lender credit equal to 1% of the mortgage (up to $10,000). Nonbank lenders like Milo and Daim are already offering crypto mortgage products (Milo has originated over $100M, including a $12M loan) with slightly higher rates and unique terms (e.g., 30-year loan with 10 years interest-only). Market impact: the move legitimizes crypto as collateral, could unlock homebuying for crypto-rich households, increase demand for BTC as a pledgeable asset, and spur tokenization of ETFs and stocks (AMZN, TSLA, S&P 500 ETFs) — though higher rates and sizable collateral buffers create trade-offs for borrowers.