Bitcoin mortgages debut with 60% haircut and no margin calls

Five years have passed since Michael Saylor’s possibly home-destroying advice about using a mortgage to keep a hold of bitcoin (BTC).

As of this week, the US government-sponsored mortgage system will finally allow Saylor’s acolytes and other BTC owners to belatedly follow this advice.

When Saylor originally told an audience to mortgage their houses to buy BTC on March 10, 2021, BTC was trading near $56,000. If anyone actually took that advice, by November of the following year, BTC had cratered 72% to $15,500.

As a result, and given the high collateralization requirements of BTC-backed loans at that time, they would have likely lost their house — unless they had access to additional assets to re-collateralize their loan.

On Thursday, Coinbase and its Better Home & Finance partner announced their first crypto-backed mortgage that conforms to Fannie Mae standards. 

Coinbase’s first BTC-backed mortgage

Like Freddie Mac, Fannie Mae is a government-sponsored enterprise (GSE) under conservatorship of the US Federal Housing Finance Agency. The net worth of GSEs are periodically swept to the US Treasury.

A “conforming mortgage” is a standardized loan that enjoys interest rate subsidies from GSEs and can be easily packaged together with other, similar loans and re-hypothecated across Wall Street.

Borrowers receive two loans. The first is a standard, USD Fannie Mae mortgage on the home. The second, secured by the borrowers’ BTC or USDC, covers the initial down payment. Only two digital assets, BTC and Coinbase’s USDC, qualify at launch.

Incredibly, borrowers receive just 40% of the market price of BTC for its pledge as collateral. In other words, a borrower must lock up $250,000 in BTC to cover a $100,000 down payment.

USDC, a stablecoin that has traded in a somewhat narrower range between roughly $0.86 and $1.10 against USD on Kraken, gets a more generous 80% credit.

Customers reliquish private key control to their crypto, holding it in custody at Better’s Coinbase Prime account for the life of the mortgage loan.

Bill Pulte’s BTC mortgage pipeline

Federal Housing Finance Agency (FHFA) Director William “Bill” Pulte ordered Fannie Mae and Freddie Mac on June 25, 2025 to prepare to count cryptocurrency as a qualifying mortgage asset.

This product is the direct result of his initiative.

Pulte is a quintessential trust fund kid, the 37-year-old grandson of the billionaire PulteGroup founder. He made his name through Twitter philanthropy engagement farming, giving away cash to strangers on social media.

His Twitter antics earned him a retweet from Donald Trump in 2019, and eventually a nomination to run the FHFA. 

His family’s charitable foundation has publicly distanced itself from him, and PulteGroup’s board removed him from his decision-making role.

Pulte’s financial disclosures list up to $1 million in BTC, similar holdings in Solana tokens, and $5-25 million in Mara Holdings, a BTC mining company. 

After Trump’s nomination, he installed himself as chairman of both Fannie Mae and Freddie Mac boards, stacked them with allies, and then ordered the very crypto underwriting rules from which his BTC portfolio stands to benefit.

This time, at 60% LTV, no margin calls

Coinbase immediately highlighted the technicality that this BTC-backed mortgage features, after an initial 60% haircut on its market value, no further margin calls or collateral top-ups. 

If BTC drops 50%, the borrower owes nothing extra as long as the pre-agreed USD payments continue. The borrower pays interest on two loans, not one, and the non-crypto backed USD mortgage is entirely USD denominated from the start.

The pledged crypto cannot be traded. Coinbase’s partner returns it only after the mortgage is fully repaid. 

If the borrower falls 60 days behind on payments, Better can liquidate the BTC and/or USDC. 

Foreclosure on the home begins at 180 days.

Read more: Michael Saylor went from ‘sell a kidney’ to $20 billion loss at Strategy

Criticism

Consumer groups have been less enthusiastic than Coinbase or Saylor about crypto-backed mortgages.

The Consumer Federation of America and National Consumer Law Center wrote to Pulte that “a system built on crypto-related assets threatens to grow the market based on what may turn out to be a house of cards.”

Amanda Fischer at Better Markets told The American Prospect the directive “seemed to be based on some tweets.”

Multiple senators have warned Pulte about his “serious conflict between your ability to order and approve the enterprises’ proposals as FHFA Director and to ultimately influence the development of such proposals as chair of the enterprises’ boards.”

The Government Accountability Office began investigating Pulte in December 2025.

Better CEO Vishal Garg, the product’s chief evangelist, fired 900 employees over a Zoom call in December 2021.

Saylor’s original vision for a BTC-backed mortgage arrived before a 72% collapse in BTC within two years.

Now, the US government-backed mortgage system is officially in the business of making that bet easier in 2026 at a 60% loan to value (LTV) that wouldn’t even have covered that drawdown.

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