Fannie Mae will accept cryptocurrency-backed mortgages for the first time, allowing prospective home buyers to pledge Bitcoin or the USDC stablecoin as collateral for down payments through a partnership between Coinbase and mortgage firm Better Home & Finance.

The program, first reported on by the Wall Street Journal, enables borrowers to transfer their digital assets from Coinbase to a Better custody wallet while retaining ownership, avoiding the need to sell crypto and trigger taxable events. For USDC holders, the structure allows them to continue earning rewards while their assets serve as collateral.

The mortgages will carry rates 0.5 to 1.5 percentage points higher than standard 30-year loans, depending on borrower…