Coinbase and the U.S. Housing Agency Better Mortgage announced an expanded collaboration to launch a housing loan product in the United States with bitcoin and USDC as collateral. Borrowers can apply for mortgages without selling encrypted assets, while avoiding capital gains tax on the sale of assets.

Mortgage ratio and loan structure

This product consists of two components: regular housing mortgages and additional loans for down payment. A down payment loan requires additional encrypted assets as collateral.

  • The bitcoin mortgage rate is 250% of the loan amount.
  • USDC Mortgage as 125% of loan value
  • The two loans were at the same rate of interest and repayment tempo

According to the announcement of both parties, such loans are supported by LISCO, which covers home-purchase loans, net-value credit lines and refinancing operations.

Transfer of assets to hosting account

Once the loan has been granted, the borrower ' s encrypted assets will be transferred through Coinbase Prime to the Better Mortgage collection account. During the life of the loan, this part of the asset cannot be withdrawn or traded.

However, borrowers still retain the proceeds of price increases on encumbered assets. As long as the loan is properly repaid, the mortgage period ' s market appreciation remains with the borrower.

It's over 60 days.

Unlike the usual encrypted pledge lending, the mortgage does not trigger an additional bond due to currency fluctuations and does not adjust the terms of the mortgage. Only 60 days after the borrower's delay may the encumbered assets be disposed of.

In exchange, such loans are usually at rates of between 0.5 and 1.5 percentage points higher than regular 30-year fixed mortgages in the United States. The scheme is currently open only to certified Coinbase One members.

Testing demand is $260 million.

Eligible users are entitled to a 1 per cent return on loan institutions, which will be used directly to offset transaction costs up to a ceiling of $10,000. It was stated that such an arrangement would also simplify the process of verification of sources of funding that were common in traditional banks.

This business started in March this year. At that time, it approved the inclusion of encrypted assets in the loan mortgage. Following the launch of testing in June, the project attracted an estimated loan demand of approximately $260 million. As a result of this expansion, the product is open to a wider range of home buyers across the United States.