How to Buy a Home With a Crypto-Backed Loan in 2025

How to Buy a Home With a Crypto-Backed Loan in 2025
July 7, 2025
~5 min read

Bitcoin once bought pizzas; today it can secure the keys to a three-bed villa. Thanks to crypto-backed mortgages, homeowners in the United States, Europe and parts of Latin America are pledging digital assets instead of wiring a cash down payment. The market is small but growing fast: Miami-based Milo has written more than US $65 million in crypto mortgage volume, while Figure, Ledn and Salt Lending have introduced similar programs that let borrowers tap up to 75 % of their Bitcoin or Ether stack without selling a single coin.

This guide explains how crypto-collateral loans work, which lenders dominate 2025’s landscape, the risks you must weigh, and the exact documentation you’ll need to walk away with a deed—not just a dream.

What Is a Crypto-Backed Mortgage?

A crypto mortgage is a secured loan where Bitcoin, Ether or stablecoins serve as collateral. Instead of liquidating tokens (and triggering capital-gains tax), the borrower transfers them to a qualified custodian. The lender then issues fiat—often up to 100 % loan-to-value (LTV) with Milo or 75 % with Figure—directly to the property seller or escrow agent. Interest rates range from 5.95 % to 10.5 %, typically higher than conventional mortgages, reflecting both crypto volatility and limited secondary markets.

If the portfolio’s value falls and the loan breaches a preset loan-to-collateral ratio (for example, 65 %), the borrower must post additional crypto or make a partial fiat payment—otherwise the position is liquidated, similar to a margin call.

Why People Choose Bitcoin-Backed Loans

Benefit Details
Avoid selling & taxes Borrowers keep upside exposure and defer capital-gains liabilities.
Speed Milo advertises two-week closings versus 30–45 days for traditional underwriting.
Global access Non-US nationals without FICO scores can qualify if they hold enough crypto.
High LTV Some lenders offer 100 % financing, eliminating the need for a cash down payment.

 

Major Lenders in 2025

Lender Max LTV Loan Size Collateral Rate* Footprint
Milo 100 % Up to US $5 m BTC, ETH, USDC 6.95 %–8.95 % 27 US states + Florida HQ
Figure 75 % Up to US $3 m BTC, ETH 9.9 %–12.4 % 44 US states
Ledn 50 % Up to US $2 m BTC only 8 %–10 % Canada, US, LATAM
Salt Lending 70 % Case-by-case BTC, ETH, USDC 10 %–11 % US & Australia

Step-by-Step: From Wallet to Deed

  1. Pre-qualification
    – Complete an online application listing crypto type, wallet balance and target property price.
    – The lender issues a soft credit pull or, for foreign nationals, reviews proof of funds.
  2. Collateral transfer
    – Move BTC/ETH to the lender’s institutional custody partner (Coinbase Prime, BitGo or Anchorage).
    – Receive a collateral receipt—your tokens are now locked until loan payoff.
  3. Appraisal and underwriting
    – A licensed appraiser values the property.
    – Underwriters verify KYC, source-of-funds and anti-money-laundering checks.
  4. Rate & term sheet
    – You select a fixed or adjustable rate (mostly three- or five-year balloons with interest-only options).
    – The contract states liquidation triggers (e.g., 65 % LTV margin call, 75 % forced sale).
  5. Closing
    – Fiat funds wire to the title company; you sign the mortgage note and receive keys.
    – Custody wallet enters monitoring mode with 24/7 oracle feeds.
  6. Post-closing monitoring
    – Daily price feeds recalculate LTV.
    – If LTV > warning level, you’ll receive a top-up email/SMS; failure to comply may liquidate part of the collateral.

Eligibility Checklist

Requirement Typical Threshold
Crypto balance 125 % of loan amount for 80 % LTV; more for higher leverage
FICO score 640+ for US citizens (Milo waives for 100 % LTV if collateral strong)
Seasoning Proof you’ve held the crypto > 12 months lowers risk premium
Property type Single-family, condo, investment; raw land often excluded
Location Not all states allow crypto liens; verify lender’s coverage map

 

Risks to Watch

  • Price volatility – A 30 % drop in BTC can push an 80 % LTV loan beyond liquidation. To buffer, many borrowers over-collateralize at 50 % or lower.
  • Custodial risk – Tokens sit with a third party; if that custodian fails, FDIC-style guarantees do not apply.
  • Regulatory shifts – The Federal Housing Finance Agency recently ordered Fannie Mae and Freddie Mac to study crypto holdings in loan assessments, but no federal insurance yet covers such mortgages.
  • Refinancing uncertainty – Balloon loans require a payoff or refi in three to five years; if crypto prices swoon, rolling the debt could be costly.

Tax Implications

Using crypto as collateral does not count as a taxable event, preserving unrealized gains. However, if the collateral is liquidated, that disposal triggers capital-gains tax dated to the original purchase price. Always download transaction CSVs from the custodian; the IRS considers forced liquidations the owner’s sale for tax purposes. Employ a CPA familiar with Form 8949 reporting for crypto.

Pro Tips for a Smooth Closing

  1. Over-collateralize at 60 % LTV or lower to survive sudden price swings.
  2. Keep a stablecoin buffer on the same platform for rapid top-ups if BTC slides.
  3. Monitor your LTV daily via lender dashboards or set Zapier alerts from CoinGecko API.
  4. Document provenance—exchanges, wallets, tax returns—to speed KYC.
  5. Lock in fixed rates if you expect Federal Reserve hikes; variable crypto loans can reprice every 12 months.

Future Outlook

U.S. regulators are warming to the idea of crypto assets in mortgage underwriting. The FHFA directive to Fannie and Freddie could spawn secondary markets, lowering rates and extending terms past today’s five-year caps. Separately, Hong Kong and Dubai now allow banks to custody crypto, hinting at a global race to mainstream Bitcoin-secured lending.

As infrastructure matures—multi-sig escrow, real-time price oracles, insured custody—crypto mortgages may shrink from a niche product into a standard menu item alongside jumbo and FHA loans. For now, they remain best suited to high-net-worth holders who can tolerate market swings and whose primary aim is to diversify wealth into real estate without triggering taxable sales.

Key Takeaways

  • Crypto mortgages unlock property purchases without selling your coins.
  • LTV, custodian quality and margin-call mechanics are the three pillars to study before signing.
  • Tax deferral is real but conditional—liquidation events reset the clock.
  • Rate shopping matters: Milo leads on high LTV, Figure on speed, Ledn on lower Bitcoin-specific rates.
  • Regulation is trending positive, but federal guarantees are still pending.

If you’re crypto-rich and house-aspirational, 2025 offers more on-ramps than ever. Do the math, read the fine print, and your satoshis could soon translate into square feet.

Follow us:

Coinxes.io

Twitter/X

Telegram

0.0
(0 ratings)
Click on a star to rate it

form_network

_
You send
1 _ ≈
_ _
1 _ ≈
_ _
1 _ ≈
_ _

form_network

_
You receive
1 _ ≈
_ _

Reliable service for exchanging cryptocurrencies 24/7

CoinXes is a convenient and secure platform for instant cryptocurrency conversion. We offer up-to-date rates, low fees and transparent exchange conditions. Support works 24/7.