Miami Startup Offers Crypto Mortgages

A fintech company Milo promises low-interest rates, less paperwork, and an option to settle loan payments in stablecoins.

A stock photo featuring Bitcoin coins, a toy house, and a piggy bank

Imagine the majority of your wealth is stored in crypto, and you want to buy real estate. No matter how diversified and profitable, your cryptocurrency portfolio means nothing to traditional lenders. To secure a mortgage, you would either need to offer your property as collateral or cash out of crypto. However, you can pledge your digital assets as collateral and get your property value financed up to 100% with Milo.

Milo has been developing this innovative mortgage since 2021, reimagining the way how crypto consumers access financial solutions. The company claims it got a long waitlist of clients who were granted early access to innovative loans. Milo plans to make their mortgages a hot product by pooling and selling them to the institutional investors or even issuing them as secured bonds.

Milo currently accepts Bitcoin, Ethereum, and a few stablecoins (USDC, UST, and Gemini Dollar) as collateral. There are two ways you can qualify for the mortgage. First, the USD value of your crypto holdings should be greater or equal to the total loan amount. Second, the USD value of your stablecoins should be greater or equal to 40% of the loan. For instance, if you want to buy a property valued at $250,000, you should either hold $250,000 worth of BTC and ETH or $100,000 worth of stablecoins.

For the duration of the loan, your digital assets are held by third-party custodians, namely Coinbase and Gemini, where Milo has custodial accounts. Each borrower’s collateral is stored separately on a sub-account. Rates for Milo’s 30-year mortgages range from 3.95% to 5.95%, and the borrower may opt to make loan payments in stablecoins.

The product Milo offers has several advantages over traditional mortgages. The company doesn’t require the credit score disclosure since it believes that your crypto holdings assess your creditworthiness. Additionally, the whole process is faster than a standard loan because your crypto helps you qualify, and Milo needs less time to underwrite your mortgage. The underwriting starts as soon as the appraisal is paid.

For non-US residents, Milo mortgages can be a convenient and unchallenging way to buy property in the United States. TradFi requires large amounts of paperwork and a thorough check of finances and documentation, so currently, only 30 percent of international loan seekers are approved for mortgages through a US bank. Milo claims its mission is to “drive more financial inclusion for Foreign Nationals within the US while making the world just a little bit more connected in the process.”

Of course, the volatility of digital assets presents a certain risk for both parties of the loan agreement. Milo says it can withstand a 65% drop in the value of your crypto assets. You’ll be given 48 hours to add to your pool of collateral before the company issues a margin call. If the value of your crypto depletes by 70%, Milo will manually liquidate the asset and store the value in USD. Fortunately, there is a bright side as well. If your assets go up in value, you can withdraw the excess crypto or opt to have your rate reduced.

"The world is changing rapidly, with how consumers make and invest their $2 trillion in crypto wealth," said Josip Rupena, CEO and Founder of Milo. "With our new crypto mortgage, we can expand our offerings to consumers that were previously denied by other banking firms just for having crypto. We have an opportunity to make sure that doesn't happen anymore, and their bitcoin wealth can now help them buy a property."