- US lender Rate has launched a crypto-backed mortgage program, RateFi, allowing borrowers to use verified cryptocurrency holdings in home loan applications.
- This initiative aims to facilitate homeownership for digital asset holders, previously hindered by traditional lending practices that required crypto to be liquidated for cash.
- The RateFi program operates within a non-qualified mortgage framework and includes a tailored valuation system for cryptocurrencies based on factors like market price and volatility.
In a move that could significantly reshape the American housing finance landscape, US lender Rate has introduced a groundbreaking crypto backed mortgage program designed to allow qualified borrowers to leverage their verified cryptocurrency holdings when applying for a home loan. The initiative marks a pivotal moment in the ongoing integration of digital assets into mainstream financial systems. For years, cryptocurrency investors have faced a frustrating reality: while their portfolios may have grown substantially, traditional lenders often refused to recognize those digital assets unless they were converted into cash. Now, with Rate’s new program, that barrier appears to be softening. The new product, branded as RateFi, operates within the company’s non-qualified mortgage (non-QM) framework. It allows borrowers to count certain verified cryptocurrency holdings as part of their financial profile—either as savings or, in specific cases, as income—without requiring immediate liquidation. In practical terms, this crypto backed mortgage approach gives digital asset holders a new pathway into homeownership.
How the Crypto Backed Mortgage Program Works
Under the RateFi structure, borrowers can present verified cryptocurrency assets as part of their underwriting evaluation. Unlike traditional mortgage programs, which typically demand that crypto be sold and converted into fiat currency before it can be counted toward reserves, RateFi introduces a valuation system tailored to digital assets. According to Kate Amor, EVP and head of enterprise products at Rate, the company evaluates digital assets using an internal model that considers several risk factors. These include:
- Current market price
- Liquidity levels
- Volatility and price fluctuations
- Historical asset behavior
By examining these elements, Rate determines how much weight a particular digital asset can carry in a loan application. Importantly, the assets do not necessarily need to be sold to qualify—though borrowers must convert crypto into cash if they plan to use it directly for a down payment or closing costs. This hybrid approach enables the lender to maintain conventional mortgage risk standards while adapting to the realities of modern wealth accumulation. The result is a structured and compliant crypto backed mortgage product that aligns with regulatory expectations while acknowledging digital asset ownership.
Why Traditional Mortgages Have Excluded Crypto
More than 10% of Americans report owning digital assets, according to Rate. Yet traditional mortgage underwriting systems have historically excluded cryptocurrency as acceptable collateral. The primary concerns have included:
- Extreme volatility
- Regulatory uncertainty
- Custody and verification challenges
- Anti-money laundering (AML) compliance
Typically, borrowers were required to liquidate their holdings. However, selling cryptocurrency often triggers a taxable event. Capital gains taxes, short-term trading penalties, and shifting market conditions can significantly reduce a borrower’s available funds. To avoid these consequences, many crypto holders have turned to pledged-asset lending structures offered by specialized crypto firms. These allow borrowers to secure loans using digital assets as collateral without selling them. However, such loans were generally separate from traditional home mortgage systems. Rate’s crypto backed mortgage aims to bridge that gap, bringing crypto closer to mainstream housing finance.
Eligible Assets and Custody Requirements
Although Rate has not publicly named the specific cryptocurrencies eligible under the program, Amor indicated that RateFi focuses on a selected group of large, widely recognized digital assets. Major US dollar-backed stablecoins are also included. To qualify:
- Assets must be held with approved custodians or centralized exchanges.
- Borrowers must provide proof of ownership.
- Monthly statements demonstrating holding history are required.
These safeguards are critical. Mortgage lenders operate under strict regulatory standards, and any digital asset inclusion must satisfy AML and Know Your Customer (KYC) requirements. Rate has emphasized that its digital mortgage platform integrates standard compliance checks into the process. This layered verification system is central to making the crypto backed mortgage viable within a traditional financial framework.
Housing Affordability Pressures Fuel Demand
The timing of this product launch is no coincidence. Housing affordability remains one of the most pressing economic issues in the United States. Younger Americans, particularly millennials and Gen Z buyers, face rising home prices, higher interest rates, and stagnant wage growth in many sectors. At the same time, younger generations are disproportionately active in cryptocurrency markets. For many first-time buyers, digital assets represent a significant portion of their net worth. Amor noted that today’s wealth-building strategies look very different compared to previous decades. Stocks, retirement accounts, and real estate once dominated personal finance portfolios. Now, digital assets play a growing role. By introducing a crypto backed mortgage, Rate acknowledges this generational shift. The program does not promote cryptocurrency speculation. Instead, it reflects a reality: for many Americans, digital assets are already part of long-term financial planning.
Federal Interest in Crypto and Mortgage Policy
The broader regulatory environment is also evolving. Lawmakers have begun exploring how digital assets might fit within housing finance systems. In June 2025, William J. Pulte, director of the Federal Housing Finance Agency, instructed Fannie Mae and Freddie Mac to prepare plans examining the role of cryptocurrency as a reserve asset in single-family mortgage risk reviews. Shortly afterward, in July, Senator Cynthia Lummis introduced the 21st Century Mortgage Act. The proposed legislation seeks to formalize guidance that would allow crypto to be considered more broadly within federal housing finance systems. Although no nationwide law currently authorizes crypto-backed mortgages across the country, these developments suggest increasing institutional interest.
A Growing Crypto-Backed Lending Market
Rate is not entirely alone in recognizing crypto’s lending potential. A small but expanding market already exists. For example:
- Nexo offers loans backed by more than 40 digital assets.
- Ledn provides mortgage-style products backed by Bitcoin holdings.
In these models, borrowers pledge digital assets as collateral rather than selling them. However, these services operate largely outside the traditional US mortgage framework. Rate’s approach differs because it integrates crypto asset evaluation directly into a regulated mortgage structure, potentially signaling a shift toward normalization.
Generational Trust Gap in Digital Assets
Public perception data further supports the rationale behind this innovation. In January, OKX released findings through its OKX Insights series based on a survey of 1,000 Americans. The results revealed a pronounced age divide: younger participants were far more likely to trust digital assets and view them as central to the future of finance. This generational trust gap may help explain why interest in a crypto backed mortgage is strongest among younger homebuyers. For them, cryptocurrency is not an experimental investment—it is part of their financial identity.
The launch of Rate’s new crypto backed mortgage product represents more than a niche financial offering—it signals a structural evolution in how wealth is evaluated within the US housing system. By allowing qualified borrowers to leverage verified digital assets without immediate liquidation, Rate has positioned itself at the intersection of traditional finance and emerging technology. As lawmakers, regulators, and mortgage giants explore formal frameworks for digital asset integration, the housing market may be entering a new era. Younger generations, already active participants in cryptocurrency markets, could benefit from expanded pathways to homeownership. Whether this innovation becomes a mainstream standard or remains a specialized option will depend on regulatory developments, risk performance, and borrower demand. But one thing is clear: digital assets are no longer on the sidelines of housing finance—they are moving steadily toward the center of the conversation.
Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.
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