Owning a home without selling crypto assets is no longer just a theoretical idea. Milo, a US-based crypto-backed mortgage company, announced it has disbursed over $100 million in home loans to date, with its largest transaction being a single $12 million crypto mortgage agreement. The company's model is simple but unconventional. Investors who own Bitcoin or Ethereum can obtain loans of up to $25 million by using their digital assets as collateral without selling them. This eliminates the need for a down payment and avoids the tax burden that could arise from selling assets. According to Milo's founder, Josip Rupena, the target audience is quite clear. These are individuals who bought Bitcoin about 10 years ago on a friend's recommendation and held onto their assets despite sharp fluctuations; today, they hold a significant portion of their net worth in crypto assets. These individuals are typically between 30 and 55 years old, have a regular income and a retirement account, but their annual income is not sufficient to purchase their desired home. Rupena notes that a typical transaction is for a home worth approximately $1.5 million. For example, consider an investor who earns $100,000 annually but has between $3 and $7 million in crypto assets. If this investor's portfolio consisted of Apple shares, it might be easier for them to obtain a loan by using collateral within the traditional financial system. However, the lack of widespread acceptance of crypto assets and concerns about volatility make these kinds of specialized financing solutions necessary.
Milo requires crypto collateral up to 100% of the property's value. This collateral can be held in qualified custodians such as Coinbase or BitGo. A self-custody option is also available for users who wish; that is, investors can keep complete control of their assets.
Interest rates start at 8.25%, and it can be used for purposes other than housing
Loans are offered with interest rates starting at 8.25%. Moreover, its use is not limited only to housing purchases. Financing can also be provided for land acquisition, home renovations, or business investments using the same model.
One of the biggest risks in the crypto loan market is the "margin call" mechanism. In traditional crypto-backed loans, additional collateral can be called when the asset price falls by 20–25%. Milo, however, says he has designed a more conservative structure. The product is designed to tolerate value losses of up to 65%. According to Rupena, in a sharp decline scenario, instead of completely liquidating the loan, the company restructures the loan amount by reducing the risk level. The collateral ratio is reduced from 100% to the 65–70% range, and the customer does not lose their home as long as they continue making payments. This approach is based on the claim, "You don't lose your house just because Bitcoin falls." The company has completed many transactions so far, particularly in Miami and throughout Florida. It is also active in Texas, California, Colorado, Connecticut, and Arizona. The record-breaking $12 million transaction mentioned in the press release was completed in Tennessee. Milo's product is also supported by leading figures in the industry. Adam Back, a Bitcoin pioneer and CEO of Blockstream, describes this model as "a game-changer in the Bitcoin-based lending space." According to Back, investors have the opportunity to accumulate equity in real estate without liquidating their long-term Bitcoin positions. Given the volatile nature of the crypto market, this model continues to carry risks.
