Better partners with Framework Ventures on $500 million Sky stablecoin credit plan amid mortgage tokenization push

Better Home & Finance Holding Company said Monday it has agreed to a strategic partnership with Framework Ventures to integrate into the Sky stablecoin ecosystem and unlock up to $500 million in credit as a designated “Star” within the network.

Separately, Framework is taking a $45 million stake in the Nasdaq-listed mortgage lender, representing roughly 10% of its stock at current prices, Fortune reported. 

Under the arrangement, Better plans to access capital allocated through Sky’s ecosystem, where sector-specific “Stars” deploy funds to generate yield that flows back into the stablecoin network, according to a statement. The integration is expected to occur through Obex, a Sky-focused incubator administered by Framework and backed by a $2.5 billion commitment from Sky.

Per the statement, Better plans to utilize this structure as an alternative warehouse funding source, intended to diversify its capital base without increasing the company’s balance sheet risk profile.

The home lender said it expects the transition to tokenized capital to reduce its funding costs by more than 100 basis points annually. Vishal Garg, Founder and CEO of Better, stated that the efficiency gains from removing traditional financial intermediaries will be passed to consumers through lower interest rates. The firm intends to scale its monthly loan originations from $500 million to more than $1 billion by 2026.

“The full realization of our plan will translate into potentially sub 5% interest rates for Better’s customers when the rest of the industry is charging over 6%, in addition to significantly lowering the capital requirements for Better to finance its future growth plans as it scales from $500 mm per month to over $1 billion per month in originations in 2026,” Garg said in the statement.

Vance Spencer, Co-Founder of Framework Ventures, characterized the partnership as a “win for all parties,” noting that Better has originated more than $110 billion in total loan volume to date. Spencer highlighted the scale of the target market, stating that government-backed conforming mortgages represent a $12 trillion asset class in the United States. 

Better will retain all responsibilities for loan underwriting and origination throughout the partnership.

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