The integration of cryptocurrencies into traditional finance has accelerated in recent years. From Bitcoin ATMs and crypto debit cards to point-of-sale payments, digital assets are finding their way into everyday transactions. Now, a new frontier is emerging: using Bitcoin and other cryptocurrencies as collateral for home mortgages. This innovative approach enables crypto holders to unlock the value of their digital wealth without selling their assets, paving the way for real estate purchases.
Traditional Lending Meets Digital Assets
In the United States, conventional mortgage lenders typically require a 20% down payment, which can be made in cash or secured by alternative assets such as business equipment, inventory, or other real estate. However, until recently, crypto assets were rarely accepted as collateral. With the median U.S. home price reaching $392,000 in April 2022, a buyer needed $78,400 in liquid funds. For crypto investors who have seen significant appreciation but lack fiat liquidity, crypto-backed mortgages offer a compelling alternative.
Early Ambitions and Cautionary Tales
One of the first major lenders to explore crypto mortgages was United Wholesale Mortgage (UWM), the second-largest mortgage lender in the U.S. In August 2021, UWM announced it would accept Bitcoin for mortgage payments. Yet by October 2021, the company reversed course. CEO Mat Ishbia told CNBC, “Due to the current combination of incremental costs and regulatory uncertainty in the crypto space, we’ve concluded we aren’t going to extend beyond a pilot at this time.” This decision highlighted the regulatory and operational hurdles facing crypto integration in traditional lending.
Abra and Milo: Bridging Crypto and Real Estate
In April 2022, crypto financial services firm Abra partnered with blockchain real estate company Propy to offer crypto-backed home loans through its Abra Borrow platform. Borrowers can pledge cryptocurrencies as collateral to obtain U.S. dollar loans for home purchases, with interest rates ranging from 0% to 9.95% depending on the loan-to-value ratio. Abra CEO Bill Barhydt stated, “While digital asset investment has skyrocketed, most investors are unable to use their cryptocurrency holdings to directly fund the most important purchase in their life, a home. Our partnership with Propy solves this and is a major step in bridging the gap between crypto and real estate.”
Milo, a Florida-based startup, is another key player. In March 2022, Milo raised $17 million in Series A funding led by M13, with participation from QED Investors and Metaprop. Milo offers 30-year fixed-rate mortgages up to $5 million, accepting Bitcoin (BTC), Ethereum (ETH), and stablecoins as collateral. Interest rates range from 5.95% to 6.95%, with closing times of just two to three weeks. Milo CEO Josip Rupena commented, “This round of financing is a validation of Milo’s vision to empower global and crypto consumers and the opportunity to bridge the digital world with real-world real estate assets. This is a multibillion-dollar opportunity.”
Ledn and Figure: On the Horizon
Crypto lender Ledn announced in December 2021 that it was preparing a Bitcoin-backed mortgage product. Having raised $103.9 million to date, Ledn has launched a waitlist for its upcoming loan. The company describes the product as “the first-of-its-kind loan offering a balanced blend of wealth-building collateral,” allowing borrowers to use their Bitcoin holdings without selling any satoshis.
Figure Technologies, co-founded by Mike Cagney, also plans to enter the space. In late March 2022, Cagney revealed that Figure would launch a crypto-backed mortgage with 100% loan-to-value (LTV) — meaning a borrower putting up $5 million in BTC or ETH could receive a $5 million mortgage. The product would feature no cash-out, a maximum loan of $20 million, a 30-year term, and payments could be made using the crypto collateral. Cagney emphasized that Figure does not rehypothecate the crypto assets.
While only a handful of companies currently offer crypto-backed mortgages, the trend is gaining momentum in 2022. As cryptocurrencies continue to integrate with traditional financial instruments like ATMs and debit cards, the concept of buying a home with Bitcoin may soon become a mainstream reality.