Bitcoin & Mortgages: What's Actually Available and How It Works

For Bitcoin holders, buying a home has historically presented a frustrating paradox: you may have built significant wealth but most mortgage lenders couldn't see it. Traditional underwriting was built around W-2 income and bank accounts. Your Bitcoin simply didn't exist in their model.

That is beginning to change, but not all in the same way. There are now two distinct developments happening in the mortgage market simultaneously, and it's important to understand what each one actually means and what it doesn't.

This guide breaks it down in three parts:

• Part 1: What Fannie Mae's crypto announcement actually means (and its limits)
• Part 2: Which lenders are using Bitcoin for asset depletion today and how those programs work
• Part 3: How Milo is different from everyone else in this space

Part 1: Fannie Mae & Crypto — What the Headlines Actually Mean

In June 2025, Federal Housing Finance Agency (FHFA) Director William Pulte made headlines when he directed Fannie Mae and Freddie Mac to begin developing guidelines that would allow cryptocurrency to be counted as an asset in the conventional mortgage process. For the first time, the agencies that back the majority of U.S. home loans were formally acknowledging that Bitcoin and other digital assets belong on a borrower's financial profile.

That is genuinely significant news. But it is easy to overestimate what it means in practice because the change is narrower than most coverage suggests.

What it actually does:

Under the proposed framework, if you hold Bitcoin on a regulated U.S. exchange like Coinbase, a conventional lender could count it as a liquid asset — meaning it can be considered as part of your reserves or as a potential source of down payment funds, in the same way cash in a brokerage account is treated today.

The key point: Fannie Mae accepting crypto means if you have Bitcoin on Coinbase, a lender can now recognize it as an asset you could liquidate and convert to cash for your down payment or reserves. That's the extent of it.

What it does NOT do:

• It does not allow you to qualify for a mortgage based on your Bitcoin holdings alone.
• You still need traditional qualifying income: W-2 wages, self-employment income, or other documented sources to satisfy debt-to-income requirements.
• You still need a cash down payment. If you want to use your Bitcoin for the down payment, the conventional expectation is that you would sell it, convert it to U.S. dollars, and bring that cash to closing.
• It does not apply to Bitcoin held in self-custody wallets. The asset must be held on a regulated U.S. exchange with verifiable documentation.

Bottom line: Fannie Mae accepting crypto is a meaningful step toward mainstream recognition of digital assets. But for a Bitcoin holder who earns non-traditional income, doesn't want to sell their Bitcoin, or keeps assets in self-custody, this change doesn't solve the core problem. That's where the next category of lenders becomes relevant.

The Coinbase + Better Token-Backed Mortgage

Coinbase and Better Home & Finance have launched a token-backed mortgage product that is worth understanding in detail. It represents a real step forward for crypto holders, but also comes with important limitations that many borrowers in this space will run into.

How the program works: A borrower pledges Bitcoin or USDC held in their Coinbase account as collateral for a separate, smaller loan that funds the cash down payment. That down payment loan is separate from the primary mortgage. The primary mortgage is a standard Fannie Mae conforming loan — Fannie Mae is simply allowing the down payment collateral loan to exist alongside a standard mortgage, which is a meaningful but narrower step than many headlines suggest.

The critical limitation: Because this is a Fannie Mae conforming loan, borrowers must meet all standard FNMA underwriting requirements. Full traditional income documentation is required. Debt-to-income ratios are strictly enforced, generally capped at 45%. Asset depletion is not available under FNMA guidelines. The loan amount is capped at the FNMA conforming limit of $832,750. No self-custody wallets — assets must be held in a Coinbase account.

Bottom line: The Coinbase + Better program works well for crypto holders who already earn sufficient traditional income and simply want to avoid selling assets for a down payment. For founders, self-employed individuals, and early Bitcoin investors with non-traditional earnings, this program does not solve the qualification problem. Those borrowers need a non-QM lender.

Part 2: Bitcoin for Asset Depletion — How It Works

A set of non-QM (non-qualified mortgage) lenders have been building programs that go much further: they let you qualify for a mortgage based on your Bitcoin holdings as a substitute for traditional income. You don't need a W-2. You don't need tax returns.

The mechanism is called asset depletion. Instead of reviewing your pay stubs, the lender takes the value of your liquid assets, applies a discount (called a "haircut") to account for volatility, and then divides the remaining balance by a set number of months — typically 60 to 84. The result is treated as your monthly qualifying income for underwriting purposes.

Example: You hold $2,000,000 in Bitcoin. The lender applies a 50% haircut, reducing it to $1,000,000. Divided by 72 months = $13,888/month in qualifying income. That income is used to calculate your debt-to-income ratio and determine what loan size you qualify for.

The 3:1 Bitcoin Requirement

Because of the haircut and income calculation method, borrowers typically need approximately three times the desired loan amount in Bitcoin holdings to generate enough qualifying income. This makes the program most practical for investors who have accumulated significant Bitcoin over time.

If you want a $1,000,000 mortgage, you generally need about $3,000,000 in Bitcoin. The math: $3M x 50% haircut = $1.5M divided by 72 months = ~$20,833/month, which supports a roughly $1M loan at standard DTI ratios.

What About Bitcoin Held in an ETF?

Bitcoin ETFs — such as the SEC-approved spot Bitcoin ETFs now offered through major brokerages like Fidelity, Schwab, and BlackRock's iShares — are generally treated on par with Bitcoin held directly on an exchange for asset depletion purposes. The ETF is held within a regulated brokerage account with standard account statements and clear ownership documentation, exactly what lenders need for verification.

If your Bitcoin exposure is through a spot ETF held at Fidelity, Schwab, or another regulated brokerage, most lenders will treat it the same as Bitcoin held at Coinbase for asset depletion qualification. The same haircut typically applies, but the documentation process is straightforward and familiar to underwriters.

The Wallet Problem: Why Most Lenders Only Accept Exchange-Held Bitcoin

This is one of the most important practical limitations in the current market, and it directly affects a large portion of serious Bitcoin holders.

Bitcoin held on an exchange like Coinbase comes with clear documentation: the exchange has KYC records that tie your legal name to your account and balance. A lender can verify that directly, just like a brokerage statement.

Bitcoin held in a self-custody wallet is fundamentally different. The blockchain publicly shows the wallet balance but there is no name attached to a wallet address. No institution can produce a statement saying "[Your Name] owns this wallet." This creates a documentation problem that most lenders simply have not solved.

If your Bitcoin is in a self-custody wallet, most asset depletion lenders cannot use those assets to qualify you for a mortgage regardless of the wallet's value. For long-term holders who follow the principle of "not your keys, not your coins," this requirement means their preferred custody arrangement makes them ineligible for most of these programs.

Part 3: How Milo Is Different

Milo has been originating crypto-backed mortgages since 2022, longer than any other lender in this space. While several lenders have recently entered the market with Bitcoin asset depletion programs, Milo's approach is fundamentally different in three ways that matter.

1. Self-Custody Wallets Are Accepted

Milo is the only mortgage lender that will consider Bitcoin held in self-custody wallets, not just exchange accounts. Most of the Bitcoin community's most committed holders keep their assets off exchanges. Milo has built a verification process to accommodate these borrowers. You should not have to choose between sound custody practices and accessing the mortgage market.

2. A 1:1 Bitcoin-to-Loan Ratio, Not Just 3:1

Milo offers a second qualifying structure: a collateralized model where Bitcoin is pledged as security for the loan. Under this structure, the qualifying ratio drops to approximately 1:1 — meaning $1,000,000 in Bitcoin can support a $1,000,000 mortgage. This dramatically expands who can qualify and allows Milo to serve a far broader range of Bitcoin holders than asset depletion alone.

3. 100% Financing, No Down Payment Required

This is the most distinctive feature Milo offers and one that no other lender in this space provides. With most Bitcoin mortgage programs, including asset depletion programs at competing lenders, you still need to come to closing with a cash down payment. Milo's collateral model eliminates this entirely. Because your Bitcoin secures the full loan, there is no down payment requirement. You can purchase a home without selling a single coin and without bringing cash to closing, staying fully invested in Bitcoin throughout the transaction.

In Milo's crypto mortgage, your Bitcoin is held in custody and secures both the mortgage and what would traditionally be the down payment. If Bitcoin experiences a significant price drop (roughly 65% from the start of the mortgage), a margin call may require you to add more collateral to maintain the required ratio — but this affects only your Bitcoin position. As long as mortgage payments are made, the property itself is never at risk. To date, Milo has never issued a margin call on a crypto mortgage.

The Complete Picture

For Bitcoin holders who have been locked out of the mortgage market — whether because of non-traditional income, self-custody preferences, or a reluctance to sell accumulated Bitcoin — Milo was built specifically for you. No other lender combines all three of these features in a single program.

Milo is a direct lender, not a broker, licensed in multiple states and actively expanding. The loan process is fully digital and designed for the way Bitcoin holders actually manage their finances.

Key Takeaways

• Fannie Mae accepting crypto means Bitcoin on Coinbase can count toward reserves or a down payment, but you still need traditional income and must sell crypto for the down payment.
• The Coinbase + Better token-backed mortgage solves the down payment problem for FNMA borrowers but still requires full traditional income qualification. Asset depletion is not available under this program.
• A growing category of non-QM lenders now offers Bitcoin asset depletion programs that let your crypto substitute for income, without selling.
• Most non-QM programs require ~3x your target loan amount in Bitcoin and only accept exchange-held assets, not self-custody wallets.
• Bitcoin held in a spot ETF (Fidelity, Schwab, iShares, etc.) is generally treated the same as Bitcoin on Coinbase for asset depletion qualification.
• Milo accepts self-custody wallets, offers a 1:1 qualifying ratio through its collateral model, and provides 100% financing with no down payment required — features no other lender currently offers.
• All Bitcoin asset depletion programs today are non-QM. Agency guidelines for crypto qualification are still being developed.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.