A growing class of homebuyers hold significant amounts of wealth in Bitcoin and other digital assets, but many still struggle to qualify for traditional mortgages.
This disconnect creates an opening for lenders like Milo. The company says it has now funded more than $100 million in crypto-backed mortgages by underwriting borrowers based in part on their Bitcoin holdings, rather than relying solely on W-2 income and traditional documentation.
Josip Lupena
In an interview with Inman, Milo founder and CEO Josip Rupena said the promise of crypto mortgages is not just about catering to digital asset enthusiasts. That means it’s addressing a structural problem in the mortgage market. Many borrowers are asset-rich but income-poor on paper, especially self-employed buyers and investors whose balance sheets don’t fit neatly into traditional underwriting limits.
“We were probably the first company to really challenge the idea of how we underwrite mortgages from consumers,” Rupena told Inman. “We know you have assets, so we’re going to take you on.”
Mortgages built for crypto-native wealth
Milo launched in 2019 and introduced what it calls the first crypto mortgage product in 2022. Rupena, who also has experience at Morgan Stanley and Goldman Sachs, said the company was founded on a simple observation. Many prospective buyers had amassed wealth in Bitcoin but didn’t want to part with their holdings to buy a home, especially if doing so would incur capital gains taxes.
This idea helped generate a lot of interest in the early stages. Rupena said Milo had more than 10,000 people on its waiting list when it launched and continues to gain momentum despite the challenging lending environment due to rising mortgage rates in 2022.
At the core of Milo’s product is a dual collateral approach. Mortgages are secured not only by the home itself, but also by Bitcoin held by a third-party custodian such as Coinbase. If the borrower defaults on payments, Milo must resort to selling some of his Bitcoin to keep the loan current.
Rupena argues that this structure better reflects how some modern-day borrowers actually build wealth. He says traditional mortgage underwriting is still heavily tied to income verification and down payment requirements, largely ignoring other important assets a borrower may own.
“There are a lot of inefficiencies in mortgage land,” he says. “Many people have a variety of assets, such as stocks, Bitcoin, and other assets, but none of them really factor into decisions.”
Cryptocurrency mortgage loans violate traditional lending rules
Despite all the buzz surrounding crypto-backed mortgages, the regulatory environment remains fragmented.
Rupena said one of the biggest barriers to growth is that mortgage lenders have to navigate overlapping regulations at the federal, state and agency levels, as well as inconsistencies in how states handle crypto-related products.
While mortgage regulations such as RESPA, TILA, and ability-to-repay standards still shape what lenders can build, additional state-level regulations and licensing requirements create an uneven playing field across the market.
“I think the regulatory landscape is limiting innovation,” Rupena said. “There may be consumers who have access to the products we offer in one state but not in another.”
That tension has become more pronounced as government-backed mortgage lenders begin to gradually shift to crypto-related products. But Lupena said recent headlines about Fannie Mae accepting crypto mortgages overstate what has actually changed.
According to him, the current structure being discussed still relies on a traditional mortgage for about 70 to 80 percent of the home price, with a separate cryptocurrency-backed loan for the down payment. In other words, the borrower still needs to qualify for a primary mortgage loan based on traditional underwriting criteria.
“The announcement a few weeks ago that Fannie would accept crypto mortgages is a bit misleading because Fannie has not changed its underwriting guidelines to consider Bitcoin in underwriting, at least not yet,” Lupena said.
This difference is important because it is at the heart of the debate over what will happen to crypto-backed loans in the future.
For lenders like Milo, the bigger opportunity is not simply using Bitcoin to pad down payments. It’s about rethinking the underwriting process itself to account for borrowers whose wealth is held in digital and non-traditional assets.
Agents are facing a new type of buyer
Lupena expects this idea to gain traction over the next three to five years, especially as more Americans build wealth outside of the classic W-2 model. In his view, crypto-backed mortgages are likely to become more mainstream as a tax-efficient product for borrowers who don’t want to sell high-value assets in the first place. But the broader concept could eventually be extended to underwriting models linked to stocks, IRAs, and 401(k)s.
For real estate agents, that change can create both opportunities and risks.
Rupena said agents working with crypto-rich buyers need to understand that these deals require expertise in custody, underwriting and trade scheduling. Financiers who are new to digital assets can experience delayed approvals and jeopardize closings, especially for fast-moving transactions, he said.
“This is such a large deal and so important that it’s not something you can just introduce to a friend who’s been doing mortgages for years,” Rupena said. “Unless they understand specifically what the opportunities are.”
Moreover, the hurdle of recognition remains high. Many consumers and industry experts continue to believe that Bitcoin is inherently too risky to support mortgage products. Rupena said this view is often driven by volatility rather than a sober assessment of Bitcoin’s long-term sustainability.
Whether regulators will ultimately act more quickly remains an open question. But one thing is becoming clear: As digital assets become a larger part of household wealth, there will be more pressure on the mortgage industry to decide whether traditional underwriting is still good enough.
For now, crypto-backed mortgages remain a niche product. But while financiers like Milo are betting on the category, they believe they are in the early stages, not the fringe.
Email Nick Pipitone
