Milo, an American cryptocurrency lending company specializing in crypto-backed mortgages, has originated over $100 million in home loans, including the company’s largest single transaction to date, a $12 million crypto mortgage.
The firm, which holds mortgage originator licenses in ten US states with more to follow, has a perfect track record of zero-margin calls across its mortgage portfolio, despite enduring consistently choppy periods of volatility for bitcoin and other cryptos, Milo said in a press release Wednesday.
The firm allows crypto holders to pledge their bitcoin or ether as collateral for loan amounts up to $25 million without having to sell their digital assets, eliminating the need for cash payouts and avoiding costly taxable events.
Stepping back, Milo founder Josip Rupena said that people who might have been advised by a friend to buy some Bitcoin 10 years ago, say, and had the courage to stick with it through recurring cycles of volatility, may find that today maybe 95% of their net worth is in crypto.
Such people will typically be between the ages of 30 and 55, have a job and maybe a retirement account, but they don’t have enough income to buy the home they want, Rupena said.
“Our typical transaction is a million and a half dollar home,” Rupena said in an interview. “A customer might make $100,000 a year, and their crypto net worth could be anywhere from three to seven million. If you were to replace Bitcoin with Apple stock, a product like ours probably wouldn’t need to exist. But because the consumer owns an asset that’s not widely accepted, plus its concerns about volatility, means products like ours need to exist to help them buy a home.”
Milo asks for 100% of the property’s value in crypto-security, which can be held with qualified custodians like Coinbase or BitGo, or there is a self-custodial option for those who want to keep complete control of their assets. The loans, which start at 8.25%, can also be used for things like acquiring land, financing home improvements and business investments.
Unlike regular crypto loans, which may have margin calls at 25% drawdown, Milo has designed the product to be more conservative, accommodating 65% drawdowns.
Even in turbulent times like the last few months, if a draft situation were to cross the necessary threshold, Milo would reduce the value of the loan, Rupena said, so the customer could continue to have the mortgage.
“We would essentially cut that 100% and bring it down to 65% or 70%, like a regular mortgage, and then they could continue to make payments. We designed it in a way that as long as a person can continue to make payments, they’ll be able to continue to have this home. They’re not going to lose their home because Bitcoin goes down,” he said.
So far, Milo has done several transactions in the real estate hotspot of Miami and more in other parts of Florida, as well as Texas, California, Colorado, Connecticut and Arizona. The $12 million transaction mentioned in the press release was in Tennessee, Rupena said.
The product has received the blessing of bitcoin pioneer and CEO of Blockstream, Adam Back.
“Milo’s product is a game changer in bitcoin lending and unlocks real-world use cases for so many bitcoiners,” Back said in a statement. “As bitcoin continues to appreciate, buyers are able to build equity in real estate and not have to sell their long-term belief, bitcoin.”
