Crypto Mortgage

Understanding Milo’s crypto mortgage

By Josip Rupena

June 16, 2023 6 min read

Table of contents
Understanding Milo’s crypto mortgage

Milo has been steadfast in its mission to redefine homeownership in the United States, this is evidenced by our initial efforts to cater to foreign nationals and less conventional domestic borrowers who often faced challenges with traditional mortgages. Milo ventured even further with the introduction of the world's first crypto mortgage, a pioneering product tailored for innovative and largely underserved crypto investors. In the past, these investors would have had to liquidate their digital assets to afford a down payment, thereby incurring substantial capital gains tax and potentially missing out on further appreciation of their digital holdings. Today, that's no longer the case. With Milo's crypto mortgage, crypto investors can qualify for a mortgage up to 100% of the value of their property using their Bitcoin (BTC), Ethereum (ETH), or USD Coin (USDC) as collateral. There's no need to sell the digital assets for a down payment, thereby alleviating the issue of affordability in the housing market. This revolutionary approach is opening a new world of possibilities for investors and aspiring homeowners alike.

Bridging the gap between crypto assets and real estate

A standard mortgage usually requires a cash down payment, often 20% of the property's value, with the remainder covered by a loan, repaid over 30 years. In the past, crypto investors faced the necessity of liquidating their digital assets to qualify for a mortgage, thereby potentially forfeiting future appreciation. Milo's innovative crypto mortgage transformed this paradigm and allows borrowers to leverage their crypto holdings as collateral. This transformative approach empowers crypto investors to extend their wealth portfolio into real estate without having to trade their digital assets for cash. In this way, Milo’s crypto mortgage provides an avenue for wealth expansion rather than a mere transfer of asset wealth.

How a crypto mortgage works

What problem does the crypto mortgage solve?

Milo's crypto mortgage has emerged as a transformative solution designed specifically to assist consumers who have significant investments in crypto but limited liquid cash assets. This innovative product offers a unique way to navigate the affordability challenge in the property market. Rather than having to liquidate their crypto assets for a down payment, consumers can retain their digital wealth, preserve potential future asset appreciation, and still invest in the property market. Additionally, by the borrower pledging crypto assets it reduces the risk for the lender and helps the borrower qualify.


Redefining crypto assets as mortgage collateral

With a strategic and secure approach, the crypto mortgage program views crypto not just as an investment tool but also as potential collateral. In a departure from traditional mortgage arrangements, Milo is able to finance up to 100% of the property's purchase price. Not all clients may require 100% financing. For borrowers who wish to bring a cash contribution to the transaction, they could post less crypto as collateral.

During the term of the mortgage, the customer’s crypto assets are safely held in cold storage with Coinbase, with ownership remaining with the client. To protect against crypto price volatility, Milo has implemented robust mechanisms including continuous monitoring of collateral and a defined process for margin calls. In the event of a significant decrease in the value of the crypto assets, clients are given an opportunity to add collateral or reduce the loan balance.

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The qualification process

Milo’s qualifying process for a crypto mortgage is akin to that of traditional mortgages. It is imperative that customers have the means to make their monthly payments without relying on liquidating their crypto assets. An added advantage of this product is that clients may be able to leverage the appreciation of their crypto assets to service their debt, enabling more efficient use of their wealth. Like most mortgages, an appraisal will be required to assess the value of the real estate collateral. Title and property insurance will also be required to protect both the borrower and the lender.

Servicing your loan

When facing non-payment, the traditional mortgage route often leads straight to foreclosure—an expensive process where all legal fees fall on the borrower. In stark contrast, Milo's innovative crypto mortgage approach provides a protective buffer. Rather than the home being immediately at risk, Milo will liquidate the customer's crypto assets but only up to the value of the missed payment. While consistent non-payment can lead to more serious consequences such as foreclosure, the crypto mortgage model offers a more borrower-friendly way to navigate debt repayment, reducing immediate financial stress. It's important to note that relying on crypto collateral to cover payments is discouraged, as it prevents the client from benefiting from the potential appreciation of their crypto assets.

The benefits of the crypto mortgage

From a consumer perspective, the crypto mortgage process bears striking similarities to a traditional mortgage. The complexity lies in the innovative technology Milo utilizes to make this possible. However, the benefits are worth the innovation:

  1. Streamlined transaction: Milo offers a streamlined and convenient solution to the often cumbersome process of real estate transactions. By eliminating the need for customers to secure a crypto loan for the down payment, wait for several months to season those funds, and still qualify for a mortgage, Milo seamlessly combines these steps into a single, hassle-free transaction.

  2. Tax efficiency: Leveraging your crypto assets for a mortgage is a non-taxable event, meaning you don't pay capital gains tax when you pledge your crypto as collateral, however, you should consult your tax advisor for your specific situation.

  3. Asset appreciation: You get to keep your crypto position, benefiting from potential future gains in the value of your crypto assets. The crypto mortgage is ideal for crypto asset holders who want to benefit from long term appreciation.

  4. Faster closing time: A Milo crypto mortgage can be closed much faster than a traditional mortgage with other lenders, generally closing within weeks, compared to the traditional 60-day period.

Consumer protection and security measures

At the core of Milo's operations lies the trust of our stakeholders. We have prioritized implementing robust security measures to ensure the safekeeping of client assets. Milo utilizes Coinbase, a leading industry provider, to maintain "vaults" for crypto asset custody. Coinbase creates individual sub-vaults for each client, ensuring that client assets are segregated and not co-mingled with the assets of other clients or Milo. Clients can confirm their digital assets location in real time on chain data, ensuring absolute transparency and trust.

Fostering the future of homeownership

Milo's crypto mortgage simplifies the process of leveraging your crypto assets. It provides a streamlined way for crypto holders to step into the property market without sacrificing their future gains. This revolutionary product offers a unique opportunity to benefit from the growing crypto market while simultaneously investing in real estate. Moreover, the mortgage process is efficient and transparent, giving borrowers visibility over their assets.

Since introducing the crypto mortgage, Milo continues to lead the real estate finance industry by meeting the evolving needs of its clients. By providing cutting-edge solutions and simplifying complex processes, Milo is fostering the future of homeownership. Whether you're a foreign national, a domestic borrower with varied income streams, or a crypto investor, Milo offers a tailored pathway to owning US real estate.

Have more questions?

Check out our FAQs or directly contact one of our loan consultants for a personalized experience.

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.


CEO / Founder at Milo

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